‘Focus on legacy, risk management’
Murugappa Group, which took over ailing firm CG Power and Industrial Solutions in November 2020, has drawn up a two-pronged strategy to address legacy issues and to evolve a robust framework for risk management and corporate governance.
“Firstly, we are addressing legacy issues, besides making a fair assessment of value erosion in the recent past, especially in the backdrop of recent controversies the company was marred with,” said Chairman Vellayan Subbiah.
“On the other hand, we are evolving a robust framework of risk management and corporate governance — one that corresponds to the nature and size of business that we aspire CG Power to grow,” he said. Over the last one year, CG Power, as a subsidiary of Tube Investments, was focused on restoring itself to its former glory and made significant progress in that direction.
Firstly, the new management pumped in about ₹700 crore primarily to settle outstanding dues and secondly restored normalcy of operations across all the three business divisions – Power Systems, Railways and Industrial Systems.
This led to sequential improvements in the quarterly financial performance of the company. “With more steps being taken towards strengthening customer engagement, supply chain, talent ramp up, new product development and exploration of new markets and segments, we believe there is significant growth opportunity, going forward,” he said.
“Our decision to operate CG Power as a standalone entity while subtly integrating the cultural ethos of the Murugappa Group would help the company evolve in the near to medium term,” Mr. Subbiah added.
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