Companies

Godfrey Phillips board gives clean chit to Bina Modi on grandson Ruchir’s charges

PALAK SHAH Mumbai | Updated on November 11, 2020 Published on November 11, 2020

Bina Modi, Managing Director of Godfrey Phillips India (GPI) and mother of former IPL commissioner Lalit Modi, has got a clean chit from the company’s board with regard to allegations of corporate governance norms violation.

Ruchir Modi, Bina’s grandson, had written a letter to market regulator SEBI and the Ministry of Corporate Affairs (MCA) alleging Bina’s appointment as MD to be illegal.

“The suggestion of alleged violations in the corporate governance practices in the functioning of the company under the leadership of Bina Modi is completely devoid of any basis and substance and is clearly motivated,” a note from a November 10 board meeting said.

The note further said that the allegations were misconceived and the company had already dealt with it in the past in the submissions made to stock exchanges and SEBI.

According to Ruchir, Bina was continuing as MD despite the resolution for her appointment (being) defeated by shareholders.

 

The Modi family, earlier headed by late K K Modi, is in a dispute over division of assets after the family patriarch died in 2019. KK Modi is said to have left behind a Will, which talks about the division over ₹ 11,000 crore worth assets among family members. There is a legal tussle over the settlement and sale of assets now. GPI is jointly owned by the Modi family and UK’s Phillip Moris Global Brands.

As per Ruchir, post the demise of his grandfather, Bina was required to call the Board of Trustees of KK Modi Trust within 30 days to unanimously decide on three options. It included a decision to continue to own all trust funds, to sell a part of the trust fund or to sell the whole of the trust. The KK Modi Trust owns the assets. The decision on any of the above options was required to be made by ‘unanimous consent’ failing which it was mandated that the entire trust including all family controlled businesses be sold immediately.

“Bina Modi was appointed despite being over 70 years and having no experience, knowledge, or qualification of handling a company of the size of GPI. The Companies Act prohibits a person age 70 years from being appointed as MD without a special resolution passed by shareholders. It has to have justification for appointing such a person recorded by the company in the explanatory statement. As Bina Modi was above 70 years, the shareholder consent was required to put in place,” Ruchir said.

Ruchir has further said that material facts having bearing on GPI and its shareholders, which were required to be disclosed for her appointment, were not disclosed to the stock exchanges and shareholders.

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Published on November 11, 2020
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