Gammell: New role

New Delhi, June 16: Cairn Energy Plc today announced that Bill Gammell would step down as chief executive officer (CEO) to become non-executive chairman as part of a top-level shakeup, while the government once again put off a decision on the sale of a controlling interest in Cairn’s Indian subsidiary to Anil Agarwal’s Vedanta Plc.

Gammell will continue as chairman of the Indian entity and retain “overall responsibility for the current Vedanta transaction”, Edinburgh-based Cairn Energy said in a statement.

Anil Agarwal-owned Vedanta Plc had struck a deal last August to acquire a controlling interest in Cairn India but had failed to win regulatory approvals for the deal, forcing the two partners to extend the deadline twice to complete the deal.

Bill Gammell, who founded Cairn in 1980, will replace Norman Murray, who is leaving the board after 12 years. Simon Thomson, the legal and commercial director at present, becomes the new CEO.

There are board-level changes at Cairn India as well. Chief operating officer Malcolm Thoms and operations director Philip Tracy have stepped down. Rick Bott, executive director and chief operating officer, has also ceased to be a director of the company although he continues to be associated with the Cairn India group in his capacity as executive director and deputy CEO of Cairn Energy India Pty Ltd, a wholly owned subsidiary of the company.

The UK corporate governance code frowns upon the practice of chief executives stepping into chairman jobs, as is the case with Gammell, which can make it hard for new CEOs to challenge their predecessors’ decisions. Cairn said it had consulted major shareholders and said they were comfortable with the decision.

Meanwhile, the government did not take up the $9.6-billion Cairn-Vedanta deal at the meeting of the cabinet committee on economic affairs today. After the meeting, oil minister Jaipal Reddy said, “It did not come up today.”

Sources said the government did not want to show that it was in a hurry to clear the deal within a day of the CAG pulling up the oil ministry on Cairn India’s Rajasthan fields.

Cairn India’s shares fell over 2 per cent to Rs 332.50 on the BSE today from its previous close of Rs 335.05.