Cairn India plunges 3% as CEO Rahul Dhir steps down

Cairn India’s managing director and CEO Rahul Dhir, who has led the organisation since its inception for around six years has put in his papers just as the company was adjusting to a new management. P Elango, director of strategy, has taken over as the interim head.

The search for Dhir’s successor is under way and an announcement is expected soon, the company said in a statement.

His departure comes just after Cairn India reported its best ever quarterly performance with a 40% jump in its net profit.

However, reacting to the news, Cairn India shares plunged 3 percent to Rs 315.70 on the BSE, while the Sensex is up 0.11 percent at 17619 level.

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Dhir’s exit, marks the consolidation of Vedanta Resources $8.64 billion acquisition of the company from Cairn.

“In the two years since Anil Agarwal announced the deal with Cairn promoter Bill Gammell, Cairn India has lost a fair number of senior managers. Dhir’s exit is likely to see an increase in this number,” Forbes reported today.

Dhir was instrumental in the successful IPO in January 2007. Under his leadership, Cairn India has grown into one of the leading oil & gas companies in India, with a market capitalization of over $$11 billion.

In February Dhir sold 15 lakh shares in the company this week to raise funds to subscribe to stock options offered to him by the firm. Cairn India board had in August last year extended Dhir’s term as the Chief Executive of the company for five year.

Forty-six year-old Dhir is a Wharton graduate and British national. He had joined Cairn in 2006 from Merrill Lynch, where he headed the energy and power investment banking business.

He is also credited as being one of the highest paid, non-promoter CEOs in India with a salary of Rs 12.3 crore last year.

In a statement he said, “It’s been a privilege to be part of Cairn India’s remarkable growth story over the past six years. We have achieved all major milestones set out at the time of the IPO. With the completion of Vedanta’s acquisition, Cairn India’s exceptional organization and unique asset base are well placed to continue to deliver sustainable growth and value for our Nation and all our stakeholders. This is the right transition point for me to pursue my entrepreneurial interests.”