The decision by Sunil Kant Munjal to step down as the joint managing director of Hero MotoCorp as well as from the company’s board when his tenure ends on August 16 is seen by corporate watchers as the beginning of the next phase of transition in the Brijmohan Lall Munjal (BML) family, wherein the brothers (sons of BML) divide the businesses of the Hero Group with an estimated turnover of $5 billion among themselves. People who have tracked the family are drawing parallels from what happened in the extended family in 2010 when the businesses were divided among the family of Brij Mohan Lall Munjal and his brothers — the late OP Munjal, Satyanand Munjal and the late Dayanand Munjal. This division had ended the cross-holdings the brothers had in each other’s businesses.
Though a company statement said that Sunil Munjal “intends to focus his time and energy on his independent and core businesses, and to pursue new business interests and has, therefore, expressed his desire to step down from the board of directors of Hero MotoCorp”, veterans who have tracked the family for a long time say that the time has come for the family to put in place a structure so that the division among brothers takes place amicably, and this may just be the beginning.
Sunil Munjal did not take calls from FE to participate in the story, but a family statement said “realignment within the BML Munjal family, to be effective from August 16, 2016, is in continuation of the Hero Group restructuring process started by late Brijmohan Lall, founder of the Hero Group, in May 2010. The current round of realignment, like the earlier one, is also expected to bring about robust growth and expansion.”
The statement quoted Sunil Munjal as saying, “Our dear father, late Brijmohan Lall, always encouraged us to spread our wings while we remain a close-knit family. In keeping with that spirit, all of us within the family unit unanimously believe that our diversification drive needs a further fillip in order to expedite the growth trajectory. This is also an exciting time for me to consolidate and strengthen some of the existing businesses and to explore new opportunities that are close to my heart.”
For the record, the extended Munjal family has never had a public discord and is one of the few business families in the country to have a family council aimed at settling any disputes or discord that may emerge among family members or their businesses.
Though the Hero MotoCorp statement on Thursday said that Sunil Munjal’s stepping down “will not impact the overall promoter shareholding, strategic direction or operational management of the company”, it is felt that with the passage of time the cross-holdings may also come to an end.
Operationally, there won’t be much impact with his departure as Sunil Munjal was not involved in the day-to-day running of the company. It was his elder brother Pawan Munjal who has run the company for long as managing director and CEO with the patriarch BM Munjal being the chairman. The succession plan was clear when on June 15, 2015, BM Munjal passed on the chairmanship to Pawan Munjal and himself became chairman emeritus. BM Munjal died in November 2015.
Sunil Munjal, apart from being the joint managing director of Hero MotoCorp, is chairman of Hero Corporate Services. He has all along been the spokesperson of the family and its external face. So much so that one year at the World Economic Forum at Davos he was constantly referred to as Pawan Munjal by a TV anchor.
Insiders say that Pawan Munjal is basically an introvert while Sunil is an extrovert so both the brothers handled their task brilliantly without either stepping into each other’s turf. While Pawan Munjal ran Hero MotoCorp, Sunil Munjal handled public policy. He was CII president between 2004-05 and is a regular on the Davos circuit. Currently also he’s the chairman of CII’s India-Pakistan CEO Forum and CII Task Force on Ease of Doing Business. “He’s highly articulate on all matters of public and corporate policy and handles issues and interaction with government with grace and maturity,” says an executive who’s worked with him.
The sons of BM Munjal — Pawan, Sunil, Suman Kant and the late Raman Kant — control Hero MotoCorp, Hero Mindmine, Hero Corporate Services, Rockman Industries and Easy Bill, Hero Future Energies, and Hero FinCorp, respectively.
Of the larger Munjal family comprising BM Munjal’s brothers, OP Munjal’s family controls Hero Motors and Hero Cycles, while Hero Electric, Hero Exports and Sunbeam Auto are with the sons of the late Dayanand Munjal. Component maker Munjal Showa, Majestic and Munjal Auto are with the family of Satyanand Munjal.
The automobile to real estate diversified Hero Group started out in the 1940s as suppliers of bicycle components around Amritsar and following the partition moved