New Delhi, Jan. 2: The Escorts Finance board has accepted the resignation of managing director Rajan Nanda.

Rumours in the industry suggest that Nanda’s decision to step down may be part of a larger succession plan to hand over the reins to son Nikhil Nanda.

Rajan Nanda had resigned on December 19, which was accepted by the board of directors at its meeting held on December 26, the company informed the Bombay Stock Exchange today.

“Perhaps he wanted to give more attention to Escorts Limited, which is going through a massive financial restructuring. He thought Escorts Limited is taking up too much of his time,” Partha Sarkar, managing director of Escorts Finance, told The Telegraph.

Nanda and Sarkar shared the post of managing directors of Escorts Finance till today.

Nanda, however, will continue to be the non-executive chairman and a member on the board of the company.

Nanda had taken over as managing director of Escorts Finance in June last year.

In October, Nikhil Nanda was inducted on the board of Escorts Limited as a wholetime director. He was designated as executive director and chief operating officer.

Prior to his elevation, there was a major organisational overhaul within the Escorts group, where most of the board members had resigned.

The reconstituted board of directors comprises former UTI chairman S.A. Dave, former union minister MGK Menon, P.S. Pritam and S.C. Bhargava.

The Escorts group, which has interests in farm equipment, auto components and healthcare, is struggling to service debts, largely due to a poor financial management and an allegedly questionable accounting system.

Escorts chief Rajan Nanda had sold the Escorts Heart Institute and Research Centre to the Fortis Group for Rs 595 crore. The decision sparked off angry protests from Anil Nanda, the younger brother of the group patriarch. Anil Nanda has challenged the transaction in court.