UPDATE: In a notice sent to the stock exchanges, the Cairn India management has confirmed Rahul Dhir’s resignation. P Elango, director of strategy will serve as the interim head. The company has also announced the same via an official press release on its website .
A Cairn India spokesperson denied that Dhir was quitting. However, senior executives within the company said a formal announcement was expected to be made at a management committee meeting at 3 pm on Wednesday. This was expected to be followed by a town hall meeting at 5 pm.
Dhir, 46, a Wharton graduate and British national, had joined Cairn in 2006 from Merrill Lynch, where he headed the energy and power investment banking business. He has charted Cairn India’s course to a hugely successful IPO in India. Vedanta completed the formalities of the transaction in December’11, overcoming significant hurdles in its quest to get into the Indian oil and gas business. It was widely expected that Dhir would leave once the handover was complete and the company was on an even keel. He leaves just after Cairn India has reported its best ever quarterly performance with a 40% jump in its net profit.
Dhir is one of the highest paid, non-promoter CEOs in India topping the league tables with ESOPs valued at close to Rs 250 crore and a salary of Rs 12.3 crore last year.
He has steered the company through a prolonged tussle with government-owned oil exploration & production company ONGC and the ministry of petroleum, over disputed tax liabilities. 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. ``Dhir is a great leader and is like a glue holding the team together,’’ one senior executive who was not authorized to speak to the press said. The company has hardly any second-rung management pipeline to speak of, he added.
Meanwhile, Navin Agarwal, Tarun Jain and Priya Agarwal from the Vedanta group joined the Cairn India board as additional directors last December, Sunil Bohra, another senior Vedanta hand, had been brought in as the deputy chief financial officer.
Cairn India has posted Q1 profits of Rs 3,826 crore compared to Rs 2,727 crore in the same period previous year as the Rajasthan block's output jumped by 40% to 175,000 barrels per day, Results in the first quarter of current financial year were boosted by higher crude oil output and currency gains. It plans to spend over $600 million over the next two years to further enhance output from the Rajasthan oilfields.