Why the Chairman and a Member of IIM Indore’s board resigned last week

IIM Indore director Dr N Ravichandran and chairman, board of governors LN Jhunjhunwala

On April 12, veteran industrialist of the LNJ Bhilwara Group Mr LN Jhunjhunwala, who is also the chairman of the Indian Institute of Management (IIM), Indore’s board of governors put in his papers with the b-school citing major differences with its director Dr N Ravichandran. As an immediate reaction, another board member and Bhopal-based retired IAS officer Dr MN Buch also resigned, claiming that through his resignation he wished to facilitate a reconstitution of the entire board.

For those of us in the media, this was not a surprising development. Since the last one year, emails written by former IIM Indore employees and by anonymous senders have been constantly streaming their way to our inboxes, mostly highlighting alleged corruption charges and court proceedings against director Ravichandran as reported in the local Indore Hindi language newspapers. The first such email was sent by none other than the b-schools ex-public relations officer himself. The director too has in the course of time faced charges of mismanagement and plagiarism and generally gotten bad press.

Local Indore journalists arent quite fans of the director, who is not known to be very warm to reporters and outright refuses comment on news stories. Last year, Jhunjhunwala sought to fix this by organising an ice-breaker meeting on the campus between journalists and the director at the 2011 convocation ceremony, where the reporters were advised to convey their dissatisfaction with the directors no comments policy. According to an account of the meeting, Ravichandran took the rather confrontational stance that ‘he was an independent person and would not run the institute according to the demands of journalists’. The meeting ended in increased mutual disrespect, with the journalists boycotting the tea gathering that had been arranged by the institute’s board of members later.

Indeed, for this story too, Ravichandran refused to make a comment when contacted by PaGaLGuY, just as he has refused to provide his side of the story in all the national newspaper coverage around Jhunjhunwalas resignation throughout last week. Ravichandran’s stoic silence makes the narrative against him a lot shriller than that which speaks for him.

We spoke to a number of people on both sides of the camp — pro-Ravichandran and anti-Ravichandran, including the two key gentlemen who had resigned from the IIM board last week — to piece together the sequence of events that led to a broken board of governors at the institute. This story perhaps does not do as much justice to N Ravichandrans version of events as it does to the more vocal anti-Ravichandran faction, for no reason other than the said silence on the director’s part. Yet, we have tried speaking to people who have worked with Ravichandran closely in the past to understand at least some parts of his side of the story.

About six months ago, LN Jhunjhunwala received a letter signed by eight IIM Indore faculty members stating that the director had been functioning in a dishonest manner and had not been completely financially sound in his handling of the institutes money. The group requested the board of governors to look into the matter. Although not one to doubt the director, Jhunjhunwala reportedly conveyed to Ravichandran that he should react to the matter in some way, which the director did not take to very favourably. These estranged faculty members have then reportedly also written about their grievances to the Human Resources Development (HRD) Ministry on three separate occasions.

In early March 2012, more allegations against the director flew in with Ahmedabad-based researcher KR Narendrababu claiming that one of Ravichandrans research papers on the subject of’Euthanasia had been a 60% direct and indirect reproduction of a previous Supreme Court judgement on the topic.

Interestingly, Narendrababu is an ex-chief administrative officer of IIM Indore who had been sacked by Ravichandran in 2009 for alleged misconduct. While leaving, Narendrababu had leveled allegations of caste-driven ‘mental torture’ against the director to the National SC/ST Commission, which the institute had denied. Over the past couple of years, other senior faculty sacked from IIM Indore have been extremely vocal about their dislike for the man.

In February this year, two IIM Indore students were caught taking drugs on campus, following which they were rusticated. Jhunjhunwala, who is based out of New Delhi, claims to have been informed of this development not directly by Ravichandran or the institute’s administration, but through newspaper reports the next day. This reportedly added to an already growing feeling of mistrust between the chairman and the director.

The director has also invoked dissatisfaction among some quarters in the school because of the perception that he had been holding IIM Indores overseas campus in the United Arab Emirates (UAE) too close to his chest instead of appointing an independent person to manage the affairs there.

IIM Indore runs a two-year Post Graduate Program in Management for Executives (PGPMX) at Ras Al Khaimah, UAE in partnership with a private agency called Global Education Mission (GEM), which is also the designated collection agent for the course fees. However, according to Jhunjhunwala, two cheques worth Rs 20 lakh and Rs 12 lakh submitted by the GEM in January and February this year against academic fee payable to IIM Indore had ended up bouncing. This only increased his mistrust of the director.

The chairmans attempts to intervene in the cheque-bouncing matter were allegedly halted by the director, who allegedly asked him to stay off the b-schools administrative functioning. Soon after, both Jhunjhunwala as well as the HRD ministry received a letter signed by twenty IIM Indore faculty members asserting that the director was being made a victim of false propaganda. The letter adjudged Ravichandran to be an excellent director and sought to be laid to rest the faculty members concern about rumours that the director was due to be sacked soon. The anti-Ravichandran group of course views this letter as a synthetic creation by the director to protect his image.

The non-intimation of the drug incident to the chairman as well as the handling of the cheque-bouncing episode were reportedly the last straws that led LN Jhunjhunwala to submit his resignation to the HRD ministry as chairman of the IIM Indore board of governors last week.

Those who have worked closely with Ravichandran over the past few years however have an entirely different story to tell. According to a faculty member at IIM Ahmedabad where Ravichandran previously taught, the man is ‘without doubt incorruptible’ and is ‘exceptionally talented and sharp’ but at the same time also carries ‘a strong sense of wrong and right’. The director was also a very popular and highly regarded operations management professor at IIM Ahmedabad among students, the kind who had fan pages on the social networks of the time.

What we also do know about Ravichandrans tenure at IIM Indore is that he has taken perhaps some of the boldest steps that any IIM has taken, two of which are entering undergraduate education and starting the first IIM campus outside the borders of India at UAE. The director has been fighting to get the undergraduate course recognised by applying for deemed university status. All these are decidedly the works of an unusually proactive administrator at the helm of an IIM, somebody who would easily be seen as too fast for the sarkari culture that the IIMs inherit.

But Ravichandran is also described by his supporters as one with a highly accentuated sense of black-and-white and as an eccentric person with the kind of interpersonal skills that end up alienating people more often than they do elicit cooperation.

Dr MN Buch, the other board member who resigned soon after Jhunjhunwala did told PaGaLGuY that the directors chair demanded some respect and if anyone had a problem with Ravichandran’s personality, such ‘petty issues’ should have been resolved informally rather than put on record. He has also called for strict action against those who had made financial fraud allegations against the director.

Supporting the decisions taken by Ravichandran over the past few months, Buch cited the example of IIM Bangalore, whose industrialist chairman Mukesh Ambani had reasserted the authority of the director over the institutes administration following a dispute at the time. If any of the board members had a problem with this, they were free to part ways with the IIM Bangalore board of governors. This point was driven home by the chairman and the board functioned in tandem with the director post this announcement, said Buch, implying that the IIM Indore chairman Jhunhunwala during his tenure had failed to establish the necessary clarity between his own role and that of the director.

The pro-director group also credits Ravichandran as being instrumental in steering the course of the school. He has acted like an Iron Man, bringing about innovative changes in the institute. While framing the proposal for the five-year integrated management programme, the director had faced a lot of opposition from the HRD ministry which was apprehensive about the IIMs entering undergraduate education. However, Ravichandran was positive about the outcome and if one takes a look at the numbers that have been enrolling in the course, it would seem as if he was right, said an official close to the director.

Adding up the accounts of people from both sides, it appears as if Ravichandran and Jhunjhunwala never really hit it off right from the beginning. It is also clear that the director’s style of functioning and his perceived arrogant personality tends to invoke strong reactions among people who work with him — the kind of person who you either like a lot or absolutely hate, and that has spawned a large number of people who would like nothing less than to bring him down. Whether their allegations are true or not is something that the courts will decide in time.

This current state of flux in IIM Indores board of governors is however irrelevant in the long term considering that the institute has already been earmarked by the HRD ministry to be provided with greater autonomy by way of a modified memorandum of association. Additionally, LN Jhunjhunwala’s tenure was in any case supposed to end in June 2012.

In the modified structure of IIM Indores board, the number of board members would be downsized from the existing 25 to around 10 to 15. Under the old structure, the chairman could nominate two faculty members as well as four more members to the board. The new and leaner structure would restrict the chairmans nomination power to only two faculty members. The rest of the members would be selected using a collective decision in which the director would have a say. The pro-Ravichandran faction believes that the board reconstitution should be hurried up with so that the institutes governance is back on track.

Currently there has been no word from the HRD Ministry regarding the next course of action that they will take about the absence of a chairman at the helm of the school. The Ministry has still not even accepted Jhunjhunwala’s resignation, and has requested him to provide a more detailed explanation for his decision to quit.

As written earlier, N Ravichandran refused to make a comment to PaGaLGuY for this story.