Director Samir Modi has warned shareholders to be “wary of his mother Bina being on top” in the continuing family battle at Godfrey Phillips India, amid news that the business is negotiating the sale of its retail unit, 24Seven.
In an interview with BT TV, Samir said that the decision, which coincides with a contentious inheritance dispute with the current Managing Director, seemed like a “betrayal” of shareholders. In addition to starting arbitration procedures against their mother, Samir and his brother Lalit Modi have also objected to their mother’s promotion to MD.
Samir said on BT TV, “Shareholders should see who’s contributing.” “This established companies worth over ₹2,000 crore, so why is it detrimental to the organisation? In just 55 days after establishing my business, it became the #1 performer on GPI. The closure of 24Seven is a betrayal of shareholders, he claimed.
Following news of the sale to New Shop, a retail start-up that opened in 2019 and now has 160 locations in 35 cities that are open 24 hours a day, GPIL’s share price fell by 4%. Samir is sceptical of the deal’s logic, and it hasn’t been warmly accepted despite being scheduled to close by the end of September.
“The market had a bad reaction. He questioned, “Why would that occur if the decision favoured the shareholders?” The company’s priorities were also questioned by Samir, who said, “We have ₹3,000 crore in reserves, no expansion plans, and no capex plans.” Why aren’t stockholders receiving it from us? “Brands take centuries to build but can fall in days or seconds,” he said in a warning.
The board had made the decision to leave the retail company in April 2024, in spite of Samir’s objections. His objections were dismissed by a Delhi court in July, paving the route for the sale. Samir questioned the choice to sell 24Seven at a loss rather than as a going concern, claiming that the company had started turning a profit and employed 1,650 people.
Additionally, he questioned managerial changes made throughout the selling process, claiming they were lacking in strategic vision. Samir made it clear that while he wasn’t against the board’s decision, he thought there had been a chance to reach a better conclusion.
Samir’s dissatisfaction was increased when the Nomination and Remuneration Committee refused to allow him to be reappointed as Director. At the company’s next AGM on September 6, shareholders will vote on this matter as well as Bina Modi’s reappointment as MD, to determine the company’s future leadership.
