VCCircle

When IDFC Private Equity invested $25 million in Sical Logistics, there were several comments posted to this forum criticising the investment decision. They were mostly related to the quality of the management at Sical, and why IDFC PE had gone and put in money in such a firm. It looks like the Mumbai-based fund had a strategy in place (see update below). Now we hear the board of Sical has been restructured. Most of the family members have quit, and the company will now be literally board run.

Essentially, all senior family members except for Ashwin Muthiah, vice chairman of the parent MAC Group, have resigned from the board. R Ramakumar, the managing director of the company, A C Muthiah, chairman, R Muthu (father-in-law of Ashwin Muthiah), Jawahar Vadivelu (son-in-law of A C Muthiah), Chandra Das, a long time associate of MAC Group have resigned from the company and the resignations have been accepted, reports The Times of India.

Ashwin Muthiah, however, stays on, and has been made the chairman of Sical. So the private equity fund has started cracking the whip at Sical. The restructuring of the board could have been possibly one of the terms of the deal. [Updated: The company in a letter sent to VC Circle says that this is part of the regular board restructuring, and has nothing to with the investment of IDFC PE.] Now there are two promoter nominees, one director from IDFC Private Equity (IDFC-PE) and three independent directors. Luis Miranda, President and CEO of IDFC Private Equity fund, has been inducted onto the board. Karthik Menon, Vice President, Finance & Strategy, Sical Logistics, is a promoter nominee and the whole time director.

“The restructuring of the board and the induction of IDFC PE is a definitive step in our efforts to make Sical a professionally managed, board-run company. We expect this effort in improving transparency and corporate governance will give confidence to our investors that Sical is headed in the right direction,” Ashwin Muthiah said in a release. This should be good news for small investors too.

Related:

IDFC Private Equity Invests $25 Million In Sical Logistics