Case Study-A Subsidiary IssuePresented By Group :-Surajeet singhSumit kumar maurya
INTRODUCTION KHL (Kenwa Hindustan Ltd.)is consumer durable and electronics company KI is a parent company of KHL KI holds 40% of stakes in KHL Keshav Nagpal is the MD of KHL Ted Hunte is the VC of KI KI wants to increase equity stakes from 40% to 51% Keshav Nagpal is not in favor of increasing stakes . But all the BOD are somehow in favor of increasing the stakes.
STATEMENT OF PROBLEM There is an extra pressure from KI to increase the stakes. Lack of support from the board of directors KHL is not at all interested in taking the risk. If they dilute 40% stakes then KHL might face some problems . Central purchase of raw material.
Kenwa International German origin Parent of Kenwa Hindustan Ltd. Due to FERA, it was forced to retain it’s stakes to 40%. In 1993,Ted Hunte ,vice-chairman threw a proposal for taking 51% stakes in KHL. Got interested in having the stake of KHL after looking at the growth of the company in the indian market.
Kenwa Hindustan Limited It is an Indian subsidiary of Kenwa International. Consumer durables & electronics company. Former name of Kenwa Hindustan Ltd. was Kenwa co. In 1982 , Keshav Nagpal became MD of it. Mainly focused on R&D . More focused on creating loyalty & brandname in the market.
Suggestions I won’t look forward for this deal. I would rather try to create the brand image & a strong goodwill among the customers. I would focus on my product quality in the market. I would look forward to enter into collaboration with some other big players interested in my company , which is already running successfully.
LetterTo, Date-04/08/2011The Vice PresidentKenwa InternationalAscon TowerGermanySir, I really appreciate your proposal of giving Kenwa Hindustan ltd. , a helpinghand to enter into the international market by providing a brand name ofKenwa International . At present Kenwa Hindustan ltd. Is at the stage where we are morefocused on exploring the Indian market and developing our Research anddevelopment . Once we are able to have an upper hand in the Indian market,Then we would look further at your amazing proposal.
I hope we will carry on our healthy relation in business . Thanking you, your faithfully Keshav Nagpal