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Hyderabad , Aug. 5

POLICE have searched the office and residential premises of Mr T. Seshagiri Rao, Managing Director of Sentini Ceramica (P) Ltd, and seized certain documents following a search warrant issued by the IV Metropolitan Magistrate here. The search warrant was issued in connection with a petition filed by Regency Ceramics Ltd.

Sentini Ceramica is a 50:50 joint venture company promoted by Sesha Suma Investments, an associate of Senitini Technologies (P) Ltd, and H&R Johnson (India) Ltd for manufacturing of ceramic wall and floor tiles. The Rs 65-crore unit is being set up at Chigurukota in Mudinepalli mandal of Krishna district in Andhra Pradesh.

Prior to becoming the Managing Director of Senitini, Mr Seshagiri Rao had worked as the President of Regency Ceramics. Though he retired from the regular rolls of Regency on January 2, 2002, he continued with the company till his resignation on January 3, 2003.

According to informed sources, Mr Seshagiri Rao's resigning and floating his own ceramic tiles manufacturing unit came as a shock to the management of Regency Ceramics.

Now, Regency suspects that Mr Rao had used its feasibility study report for setting up a similar manufacturing unit in the area where Sentini is being established today. The report is stated to have been prepared by a committee constituted by Regency in 1997.

These apart, Regency sources said that within a span of one month of Mr Rao's resignation, 20 people had quit the company. Till today, 60 marketing and technical people are stated to have left Regency and joined Sentini Ceramica.

"Many experienced employees were lured away to demoralise and destabilise Regency establishment." Regency believes that Mr Rao along with H&R Johnson had conspired to sabotage its brand image, sources added.

When contacted by Business Line, Mr Seshagiri Rao, however, denied Regency charges. He said that Regency, which has a sort of monopoly in South India in ceramic tiles business, seemed to have been feeling that the emergence of Sentini, which was planning to have an installed capacity to produce 50,000 sq. mtrs of ceramic tiles per day, was a threat to its dominant position in the South.

Stating that during his stint at Regency, the company's turnover had increased from mere Rs 6 crore to Rs 200 crore per annum, Mr Rao said, "I have built it and brought it up".

He had served Regency for a period of 8 years and "it is common that the established industries do not take kindly to the emergence of new entrepreneurs/ enterprises for obvious reasons - more so when the emerging entrepreneur is a former employee".

With regard to the suspicion that he had used Regency's feasibility study report, Mr Rao said, "I have a brain and there is nothing to steal". Moreover, the technology and equipment was mainly sourced from Sacmi Imola of Italy and "we have paid more than $1 lakh for the technology transfer".

This apart he said that his joint venture partner H&R Johnson was having 50 years of experience in the ceramic line and was capable of giving all the indigenous equipment. "There is nothing to steal and also there is no breach of confidence," he asserted.

With regard to the charge of luring people from Regency, he said the he had not lured anyone from the company.

" So far 70 employees from Regency have joined Sentini. More than 100 employees of Regency have sent me feelers. Why these people want to join Sentini is best known to them. I don't want to comment on this," he said.

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