The Bitter Battle for Godfrey Phillips India's Inheritance
The battle for control of Godfrey Phillips India (GPI), the country's second-largest cigarette maker, is reaching its climax at the upcoming annual general meeting (AGM) on September 6th.
Bina Modi's Victory
On the eve of the AGM, Bina Modi, the group matriarch and Chairperson and Managing Director (CMD), received a significant advantage. The Delhi High Court allowed her to cast a vote on behalf of the K.K. Modi family trust, which holds nearly 47.5% of the company's shares. This decision effectively tipped the balance in favor of Bina Modi and sealed the fate of her estranged son, Samir Modi.
Samir Modi's Ouster
Samir Modi, Executive Director of GPI, is facing removal from the company due to his opposition to his mother's leadership. A resolution seeking his ouster and the renewal of Bina Modi's term as CMD will be voted on by shareholders at the AGM. Samir claims he is being targeted for questioning the company's decisions, including the sale of its retail business, 24Seven.
The 24Seven Controversy
The decision to sell 24Seven has been a point of contention between Bina and Samir. Samir argues that the business was profitable and should not be sold, while Bina maintains that it was a necessary step to focus on the company's core business.
Financial Performance and Remuneration
Despite the family feud, GPI's stock price has more than tripled in the past year. However, questions have been raised about the high remuneration packages of both Bina and Samir Modi.
The Future of GPI
The outcome of the AGM will determine the future of GPI. Bina Modi is focused on growing the company, while Samir suggests dividing the K.K. Modi group among family members. The board remains divided, with most directors backing Bina Modi and her daughter, while Samir has the support of his brother, Lalit Modi, and several proxy firms.