Godfrey Phillips India’s Nomination and Remuneration Committee decided against Samir Kumaar Modi’s reappointment to their board because his ‘overall conduct in the board meetings and outside is much against his fiduciary duties and responsibilities as an Executive Director of the company,’ the company’s communication to its shareholders said.
“The NRC observed that Samir Kumaar Modi’s overall conduct is much against his fiduciary duties and responsibilities as an Executive Director of the Company. Accordingly, the NRC unanimously decided to recommend against his re-appointment as a Director keeping in view the overall interest of the Company and its stakeholders,” the communication said.
Samir Modi was ousted from the board of Godfrey Phillips India at a meeting on August 7 as fellow directors didn’t support his reappointment. Godfrey Phillips has appointed Charu Modi, the daughter of Bina Modi and sister of Samir and Lalit Modi, to the company’s board in place of Samir Modi.
This is a part of the ongoing family dispute in which he and his brother Lalit Modi are fighting their mother Bina Modi over an inheritance of ₹11,000 crore to ₹30,000 crore.
Charu, Samir, and Lalit Modi are children of the late KK Modi, who left behind a business group with interests spanning tobacco, direct selling, 24/7 retail, cosmetics, agrochemicals, and education before his demise in 2019.
A Delhi court on July 31 had said FMCG major Godfrey Phillips can now exit from its loss-making retail business of 24Seven as a court lifted an injunction placed on the exit.
The company wanted to exit the retail business and had made an announcement regarding this recently. But on June 27, a Delhi court directed it to maintain the status quo regarding the 24Seven retail operations on an application by Samir Modi, who had sought the injunction.
Talking to Business Standard about the exit, Godfrey Phillips India Chief Executive Officer Sharad Aggarwal said that exiting from the retail business after operating it for more than 15 long years, which continued to remain in huge cash losses of more than Rs 700 crore, is a well-thought decision of the Board. “The decision of the Board was guided by its consistent approach to move away from non-core loss-making businesses. The Company had earlier moved out of the tea and chewing business due to similar reasons. Exiting from non-core business has helped the team remain focused on core profitable businesses and also create shareholder value,” he said.
He also said that under the able leadership of Bina Modi and a strong team of professionals, the company has been doing exceptionally well as an organisation. “We have gained significant market share in our domestic cigarette business since 2019. Our current market capitalisation has increased to Rs 30,000 crore, which is approximately 5 times what it was in 2019. We have put in focused efforts to expand our export of unmanufactured tobacco business and it continues to show an upward trend. During the close of FY24 we had recorded an all-time profit before tax upwards of Rs 1,000 crore,” he said.
Aggarwal also reiterated that there has been a stupendous growth of 389% (6,170 from 1,262) in GPI’s share price since Bina Modi took charge, while the stock exchange grew at 105% (82,420 from 40,286) – Sensex.
Talking about the expansion of the cigarette business, he said, “We aim to invest capital by entering new markets of South and East, which will further help in increased market share; we plan to significantly invest in our leaf business to further exploit the potential; our international cigarette business is fortified with processes and systems and has started to see green shoots,” he said.
On the relationship with Philip Morris International (PMI), he said it has been critical and is based on mutual trust between the two promoters. “After Bina Modi has taken over as MD of the company, the relationship has only got stronger, which is also evident by the sheer unprecedented growth of Marlboro in India over the past 3 years,” he said.
First Published: Aug 30 2024 | 7:59 PM IST