Kolkata: Shib Sanker Mukherji will step down as chief executive of EIH Ltd, which runs Oberoi hotels, making way for chairman Prithvi Raj Singh Oberoi’s son Vikramjit Singh Oberoi to take over the reins as managing director from 1 April.
The decision on restructuring the top management was taken at a board meeting on Tuesday, ending years of speculation about succession at one of India’s biggest hotel companies, which runs at least 28 properties in India and abroad.
Mukherji, 67, a hospitality industry veteran who joined the company in March 1972, expressed his desire to step down for personal reasons, EIH said in a regulatory filing.
Mukherji, whose term as vice-chairman and chief executive officer was set to end in 2018, couldn’t be contacted for comment.
Vikram Oberoi, currently joint managing director and chief operating officer, will be responsible for day-to-day management of EIH from 1 April, the company said. He joined EIH’s board first as a non-executive director in December 1993 and became an executive director in July 2004.
Vikram Oberoi has for years been managing director of EIH Associated Hotels Ltd, a joint venture between the Oberois and the Rajan Raheja group, which runs Trident hotels.
Mukherji will, however, continue to be executive vice-chairman of EIH.
Arjun Singh Oberoi, Prithvi Raj Singh Oberoi’s nephew, who is also a joint managing director, will be re-designated as managing director, development, from 1 April. He will work under the “guidance and direction of the chairman”, EIH said.
Last August, octogenarian Prithvi Raj Singh Oberoi had said he had decided not to choose between his son and nephew for the top job. The decision, he had said, would be taken by the company’s board when Mukherji decided to retire. Previously, he was managing director, but demitted office in January 2013.
The extended Oberoi family owns a 35% stake in EIH, which is evenly split between the two lines. Arjun has already inherited the late Tilak Raj Singh Oberoi’s stake in EIH under a will of his father. Founder and former chairman, the late M.S. Oberoi, had, in his lifetime, divided the ownership in the company between his two sons.
Apart from the Oberoi family, two companies own substantial stakes in EIH—ITC Ltd (16.1%) and Reliance Industries Ltd (18.5%). Reliance Industries has at least two representatives on EIH’s board—Nita Ambani and Manoj Modi.
Though Reliance Industries was invited to make an investment in EIH in 2010 to strengthen the Oberoi-led management against any potential hostile takeover bid by ITC, EIH officials have maintained that the Ambanis have not interfered with the management of the company or its succession planning.
At the same time, cigarette-maker ITC has maintained it never had any intention to wrest control of EIH from the Oberois, though it was keen to pursue growth together. It started investing in the company’s shares in 2000-01.
