Mr. K L Dhingra has joined ITI Limited as its Chairman and Managing Director on 8th April 2010. Prior to this, he has been the Chairman and Managing Director of Housing and Urban Development Corporation (HUDCO), New Delhi from September 2007 to April 2010.
Mr. Dhingra has more than 12 years’ experience as Board Level Executive and more than 5½ years as Chairman cum Managing Director. Earlier, he has worked as Director (Finance) in Mumbai Railway Vikas Corporation Limited (MRVC), a PSU under the Ministry of Railways and also as Director (Finance) in Indian Rare Earth Limited (IREL), a PSU under the Department of Atomic Energy.
Mr. Dhingra is Masters in Commerce (M.Com) and Bachelor in Law. He took Masters in Business Administration (MBA Finance) from Faculty of Management Studies (FMS), Delhi University. He has acquired additional Banking qualifications from India (CAIIB) and UK (ACIB, London). He passed A.C.I.B. (London) examination globally in July 1997. He is the Fellow of The Indian Institute of Banking and Finance, Mumbai, the Fellow of The Chartered Institute of Bankers in Scotland, Fellow of the Financial Services Institute of Australasia (FINSIA) and also an Associate member of Chartered Institute of Bankers, UK, now renamed as IFS School of Finance, UK.
Many leading organizations have conferred on him awards for ‘Corporate Excellence’, ‘Industrial Excellence’, ‘Performance Excellence’ and ‘Management Excellence’. He has been a member of the prestigious Experimental Reimbursable Seeding Operation (ERSO) Trust Fund of UN-Habitat, as a financial expert representing Asian countries.
Mr. Dhingra has been elected as Vice Chairman of Standing Conference of Public Enterprises (SCOPE) in its biennial elections 2013-15, for the third time in a row. He has been the Chairman of the Finance Committee of SCOPE also.
With a distinguished career in Indian public sector and a strong professional credentials in finance, you have also achieved the distinction of winning the third time in a row as the Vice-Chairmanship of Standing Conference of Public Enterprises (SCOPE) with a record margin, winning against seven CMDs of CPSUs (in the recent elections). You had in 2011 also won it with a record margin, against four CMDs of CPSUs. What is the secret of your success in winning national level elections, which demands high degree of professional and personal credibility?
I have been in the Board level position for more than 12 years in four central PSUs under different administrative Ministries. I have also been working as CMD for more than 5 ½ years now I have also been associated with SCOPE Executive Board for more than 8 years – two terms as the member of the Board from 2005 to 2009 and earlier two terms from 2009 to 2013 as its Vice-Chairman. Because of my long experience at Board level positions and my long association with SCOPE Board, my relationship with the fellow PSUs has been quite good and my contribution to SCOPE has been appreciated by the members of SCOPE. Therefore, they reposed confidence in my professional and personal credibility and this has resulted in my success for the third consecutive record win.
SCOPE, as a body of CSPUs, holds tremendous responsibility and authority for addressing the issues for the interest of CPSUs. How do you assess the role played by SCOPE and what new role you would expect to be played by SCOPE in coming times?
Public Sector Units (PSUs) have played a crucial role in country’s growth dynamics while significantly contributing to the social development also. In the post globalization era, they have performed admirably well and have successfully transformed themselves into commercial global entities. Their strength and vitality was especially visible during global meltdowns and domestic tribulations. The efforts of PSUs in catapulting the nation to the forefront of all-round development for sustainable economic growth are laudable.
SCOPE has been working with a vision to enable Central Public Sector Units (CPSUs) to be globally competitive in a market driven environment and with a mission to facilitate the endeavours of its members in improving their overall performance. SCOPE is having a larger perspective and responsibility to provide a platform for greater handholding, representing CPSUs in the Government by way of policy advocacy, image building for CPSUs, and sharing of good practices. This is a big challenge to SCOPE given the scenario of the slowdown in the global economy.
Having associated with the SCOPE activities for long, I feel extremely proud to be part of the role being played by SCOPE in bringing all stakeholders under one umbrella to discuss and achieve the objectives of the CPSUs in general and those of each CPSU in particular.
With a track record of success all through the career and specifically in HUDCO, you have been assigned the present role as CMD, ITI Ltd, a troubled PSU. What has been your experience till now since you took over?
My present assignment is quite challenging. ITI has been into losses for the last 11 years consecutively, while earlier in the nineties also, it has been into losses for three years. It has been struggling to revive. Any chronically ailing PSU with a large manpower and very large infrastructure to support takes some time to come out of losses. Revival is a process, where the losses are reduced in the first instance, before reporting the Profit. Because of my contribution in the successful turnaround of Indian Rare Earth Limited on sustainable basis, where I worked as Director (Finance) from the October 2000 to July 2004, I can see ITI inching towards turnaround. However, the revival plan approval has been somehow delayed due to the long procedural delay on account of OA / Ministry and BIFR/BRPSE procedures.
It has been quite challenging for me in ITI from the day I have assumed the office. It is tough in terms of orders from major customers, i.e. BSNL and MTNL, tough in terms of new projects also. Recession in the IT sector set in early this decade and last 3 years have been years of turmoil for the Indian telecom sector. Though the telecom business in India is growing exponentially, we have seen the declining trend of procurement of telecom equipments by giants like BSNL and MTNL, who are our esteemed customers. There was hardly any procurement from these service providers which has badly affected the business of ITI. The defence procurement and other telecommunications equipment procurement have been very lean and this is a cause of worry for all of us.
ITI has been over-dependent on BSNL and MTNL business, which was 80-90% of the total turnover when I took over. Subsequently, from the year 2009-10, both BSNL and MTNL also slipped into losses and their share of business drastically came down to 20% in the turnover of ITI at present. Moreover while BSNL and MTNL losses have gone up during the last three years, in ITI we have been in a position to bring down the losses during this period. Despite the losses of BSNL/MTNL are going up, ITI losses are declining ever since I joined. MoU rating of ITI in 2011-12 is highest in the last ten years. In the just concluded year – 2012-13, we are able to reduce our losses to Rs.182 Cr from losses of Rs. 369 Cr last year and peak level losses of more than Rs. 700 Crore. This is possible due to the prudent financial management and diversified business plans put in place.
This is here my experience of working as Director (Finance) in Mumbai Railway Vikas Corporation and also as Chairman and Managing Director of Housing and Urban Development Corporation (HUDCO), where both these PSUs achieved new performance milestones, is coming handy for achieving the successful goal of ITI’s Revival.
We are also making all-out attempts to get ITI the status of deemed or preferred defence PSU.
ITI was declared sick and loss making in the year 2004 and referred to BIFR. Initiatives have been taken by the Management to bring ITI back on track, but the revival plan is pending so far. After taking over, I have involved myself totally to see that the Revival Plan should be finalized as soon as possible. At present Revival plan is in the very advance stage and pending with BRPSE which may be finalized soon. After approval of the Revival Plan, I am confident that ITI should be into profits by 2014-15.
As you know, success in any situation including business situations in Public Sector is strongly influenced by the leadership ability of CMD. What are the key attributes of a PSU CMD, which are crucial for success?
Any PSU is influenced by the CMD’s leadership quality. Leader has to work with the available resources to achieve the short term and long term goals of the company. This requires any CMD to be more meticulous in utilizing the resources. Every day leader has to face the challenges of time and should be able to use his ingenuity to convert the calamities into opportunities for taking the organization forward.
As per the new CSR Guidelines of Department of Public Enterprises, CMDs of CPSUs are expected to be passionately involved in CSR activities. But in practice, CMDs may have different areas of passion, not necessarily CSR.
a. How do think, this issue of involvement of CMDs in CSR is going to be addressed? and
b. What role possibly SCOPE can play to get genuine passionate involvement of CMDs in CSR of their PSUs?
As far as business development and diversification plans are to be implemented, yes the CMD’s passion has to be on topmost priority. This passion should never come in the way of implementation of CSR as this speaks about the company’s commitment and responsibility towards civil society. As CSR addresses the sustainability of business development, CSR should be given as much importance and priority as other activities of corporate governance.
The revised CSR guidelines mention that, if the philosophy of CSR and Sustainability is to be ingrained in the DNA of the organization, and be reflected in the organizational culture and involve all employees engaged in diverse business operations and activities, it is imperative that the top management leads from the front in bringing about the required attitudinal and processual transformation. They have to demonstrate their belief in the change in order to bring about the desired change. The two-tier structure, comprising of a Board level committee headed by either the Chairman and / or Managing Director, or an Independent Director, and a group of officials headed by a senior executive of not less than one rank below the Board level – which the CPSEs are mandated to create, is expected to have the authority and influence to be able to steer the CSR and Sustainability agenda of the company. SCOPE should be helping every PSU to be following the above guideline with utmost importance.
Incidentally, in my earlier assignment as CMD of HUDCO, New Delhi, HUDCO was the first PSU to implement DPE’s guidelines on the allocation of a part of the profit for the CSR activities.
Any other information, you want to share with the readers of CSR VISION?
Most of the PSUs are signing MoU with their administrative Ministries for their annual performance commitments. When I took over ITI, MoU rating of ITI Ltd was ‘Fair’ and our MoU score was very close to being categorized as ‘Poor’. However, with concerted efforts, we could not only reduce the losses of ITI from peak level of more than Rs. 700 Cr to Rs. 182 Cr in the year 2012-13, but our MoU score has also improved considerably to ‘Good’ from ‘Fair’ in the year 2011-12. These developments make me feel confident that the first PSU of the country is very close to turnaround.