Calcutta, Feb. 7: City-based software firm Descon is going to exit power generator DPSC Ltd, in which it is the single largest shareholder.

The Descon board met on Friday and decided to sell its entire 32.31 per cent stake in DPSC to Orbis Power Venture — the special purpose vehicle of Srei Infrastructure Ltd and India Power Corporation Ltd (IPCL).

The board has also asked Descon managing director S. Radhakrishnan to step down as the MD of DPSC, formerly Dishergarh Power Supply Corporation Ltd.

After the Descon meet, the board members of DPSC met, and Radhakrishnan tendered his resignation, which was soon accepted.

Debi Prasad Patra, a former IAS officer who is also the vice-chairman of Mitsubishi PTA, has been nominated as the new managing director of DPSC. He holds the same post in IPCL, too.

“Yes, I have stepped down from DPSC. The Descon board wants me to focus on the IT firm and grow it further,” Radhakrishnan said.

Orbis now holds 57.17 per cent in DPSC after it bought out the stakes of insurers LIC, GIC and Andrew Yule through an auction conducted by an officer appointed by Calcutta High Court.

Orbis had quoted Rs 710 per share, which is more than Descon’s bid of Rs 705 a share. It has come out with a mandatory open offer for another 20 per cent stake in DPSC.

Public shareholding in the power firm amounts to only 4.56 per cent. Orbis’s associates hold close to 5.96 per cent.

Hemant Kanoria, the chairman and managing director of Srei, said the DPSC board had received the offer from Descon and was reviewing the proposal.

“We may buy the entire holding from Descon provided it conforms to the Sebi regulations,” he said.

If Orbis agrees to buy Descon’s shares at Rs 710 apiece, the IT firm will rake in close to Rs 98 crore.

Kanoria has also been nominated as the chairman of DPSC last week after the nominees of the LIC, the GIC and independent board members stepped down after the insurers and Yule concluded their stake sale.

Patra, Kanoria and Jyoti Poddar, the director of IPCL, have joined the DPSC board.

However, Descon’s exit from DPSC may not be easy. The company is fighting a legal battle with Andrew Yule over ownership issues.

Some minority shareholders of Descon had approached the Company Law Board alleging mismanagement and claiming that an illegally created trust was controlling Descon.

DPSC also holds a 10 per cent stake in Descon, making it a beneficiary if Descon sells the DPSC stake.

DPSC is listed on both the Calcutta Stock Exchange and the National Stock Exchange. Descon is an unlisted firm. It occupies two floors of the DPSC building in Salt Lake’s Sector V.

Radhakrishnan said he had requested the new management of DPSC to allow Descon to work from the building till the time it made its own arrangements.

If Descon exits DPSC, it will put an end to an acrimonious conflict, involving a court battle that spanned over the last two years.

Descon tried its bit not to let DPSC get out of its control but Yule, which had initiated the stake sale process, seemed to have fulfilled its objective.