The key family members will now become part of the Murugappa Corporate Board, a non-statutory body no doubt, but nonetheless quite powerful as it will be solely responsible for strategising decisions and planning future course of action for group companies.

Group companies like EID Parry India Ltd, Tube Investments of India Ltd etc will have a regular statutory board of directors and companies will be run by competent professionals. The MCB board members will be in charge of key functional areas like marketing, finance, human resources development, technology etc for chosen companies and will also act as the mentors of these companies and will have representation on the boards of these companies.

The key change that is taking place with these organisational changes is that the Murugappa family members will step down from day to day operations of various companies they were hitherto heading.

To strenghten the MCB, the plan is to induct three more non-executive directors into the governing body who will be providing expert inputs and as the newly designated chairman of MCB MV Subbiah described "an outsiders view."

The key changes that have been made for the Murugappa group are: MV Subbiah who is the group CEO will be the chairman of the new corporate board and lead the group for strategising new vision for future and for communication of better governance practices.

MA Alagappan till now vice-chairman of the group, COO and heading the investment outfit Cholamandalam will be vice-chairman strategy and be a mentor for Tube Investments and marketing services businesses.

A Vellayan now managing director of Tube Investments of India Ltd has been given charge of Group Marketing and will be a member of EID Parry and Coromandel Fertilisers Ltd.

MM Murugappan will be director technical for the group driving technology including IT and research but will also be responsible for guiding as a member Carborandum Universal and the plantations business. MM Venkatachalam will be director Humar Resources Development of the group and also a member of the financial services and Parry Confectionery.

The only non-family member of the group in MCB will be Partho Datta who will be president Finance for the group and will be looking after legal aspects and financial reengineering of the group's portfolio.

Subbiah, speaking to press persons on the reorganisation of the group, said the changes were being made to enable the group to become globally competitive and face up to the challenges of the new millennium.

The entire process of regoranisation of the board and selection of nine CEOs to head various group companies is expected to take three months. Subbiah said the CEOs will interact with mentor members of each group company and take proper decisions to make the activities more productive and viable.

There will not be any change in the existing statutory board of directors of each company. CEOs for all the nine companies will be named by middle of January next year.

Subbiah iterated that the changes were forced on the group by historic developments in the country. "The MRTP Act of 1973 has forced the family to dilute holdings in group companies," he noted adding "we are trying to innovate ourselves." He was clear that with WTO coming in force from 2002, competition will intensify and there will be no room for non-performers within the group as productivity will be the most important thing in business for future.

Finance director Partho Datta disclosed that the group posted a sales turnover of Rs 1,800 crore for the first half of 1999-2000, a 20 per cent growth over the previous corresponding period. PBT was Rs 147 crore, a 50 per cent jump than the comparable six months of last year and PAT at Rs 110 crore was up 40 per cent for this period.