Micromax CEO Set to Quit, Promoters to Take Control

Vineet Taneja, chief executive officer of Micromax Informatics, is on his way out, with the promoters of the country’s largest domestic mobile phone maker junking the idea of hiring top professionals to transform the company and instead riding back to manage day-today operations.

With this, the four promoters, who together own about 80% in Micromax, have taken charge of the company as the industry goes through its worst phase in four years.

Taneja, who joined Micromax in July 2014 after heading the cellphone business at Samsung India and stints at Bharti Airtel and Nokia, follows a battery of senior professionals who have moved out of the company in the past two months.

Taneja was unreachable for comment. An e-mail sent to Gurgaon-based Micromax did not elicit a response.

“The promoters want to control the business and have not left much free space for the professionals, which has led to so many exits,“ said a top official who quit Micromax recently .

Rajesh Agarwal, one of the founders, handles sales and sales support, human resources, LED television and international business, while another founder, Vikas Jain, overlooks the tablets business and finance. Rahul Sharma handles sister brand Yu, marketing and products, while Sumeet Kumar is in charge of IT, research & development and government liaison, said a person familiar with the matter.

Prosenjit Sen, who was vicepresident of sales, quit last month and joined a US company. Khaja Muzaffarullah, who headed feature phones, also left. Teja Gudena, vice-president for R&D based out of Bengaluru, has moved out. Chief financial officer Badal Bagri resigned last month.

The first acrimonious exit was that of Micromax chairman and former Airtel CEO Sanjay Kapoor, who quit in August amid charges of misappropriation of funds. Kapoor has denied the charges, which he said were levelled to “illegally“ deprive him of his stock options.

“With other professionals in the company, there were differences over how to take the company forward. While the professionals wanted the company to invest in R&D such as new software and design, the owners were reluctant,“ said another person aware of the developments.

The Micromax promoters have been in talks with Chinese ecommerce firm Alibaba and Japanese communication giant Softbank to sell stakes and raise funds. The discussions have still not been productive, said an industry executive with knowledge of the matter. “It is unlikely that any deal will fructify in the immediate future,“ said another industry executive.

A recent report by market tracker Counterpoint Technology Market Research showed that while Micromax has increased sales from online platforms, it faces pressure in $50-100 price segment from Intex and Lava, among others. Samsung led the overall mobile market with a 19% share in July-September, while Micromax had 13.7%.

 

Source: The Economic Times (Mumbai)

Date: 20th January, 2016.

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