Chennai: Shares of Ashok Leyland on Wednesday tumbled 10.5 percent after the company announced the resignation of its CEO and MD Vinod K Dasari with effect from 31 March, 2019.
The stock tumbled 10.46 percent to end at Rs 106.60 on BSE. Intra-day, it dropped 11.12 percent to Rs 105.80. On NSE, shares of the company plummeted 10.42 percent to close at Rs 106.60.
Hinduja group flagship firm Ashok Leyland's Chief Executive Officer and Managing Director Vinod K Dasari has quit citing personal reasons and the company board has accepted his resignation, a top official said on Tuesday.
However, the board at its meeting here on Tuesday asked him to continue till the end of March 2019 to facilitate a smooth transition, Ashok Leyland Chairman Dheeraj Hinduja, who was elevated as Executive Chairman in view of the resignation of Dasari, said.
The board had reappointed Dasari as Managing Director and CEO for a term of five years from 1 April,2016 to 31 March, 2021.
"This (resignation of Dasari) was something unexpected. The board needs time to discuss this (and find a replacement). Vinod has done an excellent job and the team in Ashok Leyland is very strong," Hinduja told reporters.
Dasari, who had been associated with the commercial heavy vehicle maker for the past 13 years, said he had been thinking about quitting for some time.
"When we came to India 17-18 years ago, it was a family decision. To come to Ashok Leyland and not go back to United States was my family decision. So, now my family is set by God's grace and I'd been thinking about it for quite some time (about quitting)", he said.
Noting that he was not keen on putting his papers when the company did not perform well about six years ago, Dasari said, "we turned around and our team did a fantastic job. The team is strong now".
Asked would the resignation of Dasari pose a challenge to the company, Hinduja said, "there are a lot of mentorship, guidance from the Board whenever needed. Of course, there are challenges, but I think, we are well within meeting the timelines".
He said the company was having a very good board of Directors and of the ten, eight were independent directors and four of them with very rich credentials in the automotive industry.
He also said Ashok Leyland had aggressive plans on light commercial vehicles, Defense and electric vehicle segments.
Talking about Dasari, Hinduja said he was a people's person. "If he fixes a target, his team will do everything and achieve that. Last five years, he changed the culture in Ashok Leyland".
Noting that the focus was on making a smooth transition to find a successor to him, Dasari said the company had been his family.
"I am not running away from something. I just want to learn something else. Right now the focus is on a smooth transition, internally," he said.
Replying to a question, Hinduja said the resignation of Dasari would not lead to a vacuum and it would be business as usual.
"Till we find a right person, based on the request of the Board, I will be the Executive Chairman. Vinod and I have been working closely whether it is a strategy, recruitment of senior people. I think it will continue. It will be business as usual," he added.
(With PTI inputs)
Updated Date: Nov 14, 2018 17:40 PM