Godfrey Phillips India’s Nomination and Remuneration Committee (NRC) has decided against the reappointment of Samir Kumaar Modi to the board, citing concerns over his “overall conduct during board meetings and outside”, which the company said went against his fiduciary duties as an executive director.
“The NRC observed that Samir Kumaar Modi’s overall conduct is much against his fiduciary duties and responsibilities as an executive director. Accordingly, the NRC unanimously decided to recommend against his reappointment as director, keeping in view the overall interests of the company and its stakeholders,” the company said in a communication to shareholders.
Modi was removed from Godfrey Phillips India’s board at a meeting on August 7 after fellow directors did not support his reappointment. In his place, the company appointed Charu Modi, daughter of Bina Modi and sister to Samir and Lalit Modi.
This decision is part of an ongoing family dispute, in which Samir and his brother Lalit are contesting their mother Bina over an inheritance valued between Rs 11,000 crore and Rs 30,000 crore.
Charu, Samir, and Lalit are the children of the late K K Modi, who left behind a business conglomerate with interests in tobacco, direct selling, 24/7 retail, cosmetics, agrochemicals, and education before he died in 2019.
A Delhi court on July 31 lifted an injunction preventing Godfrey Phillips from exiting its loss-making 24Seven retail business. The company, which had recently announced plans to exit, had been barred by a court order on June 27 after Samir sought an injunction to maintain the status quo regarding the operations of the retail chain.
Godfrey Phillips India Chief Executive Officer Sharad Aggarwal, speaking to Business Standard about the exit, said that after operating the retail business for more than 15 years, which accumulated cash losses exceeding Rs 700 crore, the board made a well-considered decision to exit.
“The board decision was guided by its consistent approach to move away from non-core, loss-making businesses. Earlier, we exited the tea and chewing business for similar reasons. This shift allows us to focus on our core profitable businesses and create shareholder value,” he said.
Aggarwal also praised the leadership of Bina, under whom the company has flourished. “Since 2019, we have gained significant market share in our domestic cigarette business. Our market capitalisation has grown fivefold to Rs 30,000 crore. We have also expanded our unmanufactured tobacco exports, which continue on an upward trajectory. By the close of 2023-24, we recorded an all-time high profit before tax exceeding Rs 1,000 crore,” he said.
Aggarwal further reiterated the company’s remarkable stock performance, highlighting a 389 per cent growth in Godfrey Phillips’ share price under Bina’s leadership, compared to the Sensex growth of 105 per cent.
Regarding the company’s relationship with Philip Morris International, Aggarwal said, “Our partnership with Philip Morris has only grown stronger since Bina Modi took over as managing director, evident by Marlboro’s unprecedented growth in India over the past three years.”
First Published: Aug 30 2024 | 7:59 PM IST
