Hope shareholders vote for the right cause, not because of corporate drama: Samir Modi

Samir Modi

As the September 6 Annual General Meeting(AGM) of Godfrey Philips draws near, Samir Modi, who is part of the promoter group and was ousted from directorship earlier this month, hopes shareholders will not fall for the "corporate drama" and instead vote for the right cause.

Talking to Moneycontrol on August 25, Modi said he contributed immensely towards Godfrey Philips in his 30-year stint and was confident that the shareholders would keep that in mind.

“I'm confident that the shareholders will vote right. The shareholders supported my candidature for the last 30 years, and I'll be taken aback if they don’t now,” Modi said.

Godfrey Phillips India has put five ordinary resolutions and one special resolution for approval from its shareholders. The special resolution seeks the reappointment of Bina Modi, Samir Modi’s mother, as the managing director.

Bina Modi heads the board which decided not to renew or reappoint Samir after his term as executive director ends this year.

“I believe the shareholder will make the right decision as there is no disclosure or reason for removal.

“I have contributed the last 30 years to the company and suddenly, because I'm raising concerns, I'm not contributing. So, I hope the shareholders will vote for the right cause not because of corporate drama,” Samir Modi said.

Glass Lewis report supports Samir Modi

These comments assume significance as the US-based proxy advisory firm Glass Lewis recommended shareholders vote against the removal of Modi and his mother Bina Modi's reappointment as the chairperson and managing director.

“Glass Lewis is an independent body and I feel more confident by the report. I hope the shareholders will vote for the right cause rather than squabbles,” he said.

The dispute between the mother and the son stems from Rs 11,000- crore Godfrey Phillips inheritance. The Modi family, which holds approximately 47.73 percent of the company's issued share capital, has been locked in a dispute over the management since the passing of former president and managing director KK Modi in late 2019.

Matters came to a head when the company said it would appoint Bina Modi, erstwhile non-executive director, promoter, and wife of late KK Modi, as president and managing director.

Company undervalued, has growth potential: Modi

Since COVID-19, taxes on tobacco have not risen significantly, the company is growing rapidly, Modi said.

"According to me, the company is still undervalued and the goal should be that in the next five years, the share prices should go up 3X. As the company is growing fast with a strong brand like Marlboro, compared to other tobacco majors our earnings ratio and share price is lower," he said. “The company has a great future as long as we are steadfast in making sure that the shareholder value continues to grow and personal biases have no place in corporate boardrooms.”

Godfrey Phillips India owns cigarette brands like Four Square, Red and White, Cavanders, Tipper and North Pole. It also manufactures and distributes the brand Marlboro under a licence agreement with Philip Morris.