Godrey Philips India shares surge 50% this month, proxy advisories against reappointment of Bina Modi

So far in August, shares of the tobacco player have surged almost fifty percent to set new record highs on most sessions of this month.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Godrey Philips stock surged over 10 percent in trade on August, extending its stellar run over the past month. The shares are in focus as four proxy advisory firms—IiAS, Glass Lewis, SES, and ISS—have urged shareholders to vote against the reappointment of Bina Modi as Managing Director.

Godfrey Phillips India has put four ordinary resolutions and two special resolutions for approval from its shareholders in its AGM on September 6.

All of the proxy advisors have asked shareholders to vote ‘against’ the reappointment of Bina Modi and the appointment of her daughter Charu Modi as Executive Director. It also asked investors to vote ‘for’ the company’s resolution to not fill the vacancy caused by the retirement by rotation of Samir Modi.

As Bina Modi’s remuneration exceeds the limits of Rs 5 crore or 2.5 per cent of the net profits of the company, Godfrey Phillips requires a special resolution, which has to be passed from a super majority of 75 per cent of the total votes polled.

At 11.55 am, Godfrey Philips shares are quoting Rs 6,178 on the NSE, higher by 6.5 percent.

Follow our live blog to catch all the updates

Opposing the special resolution, Glass Lewis observed there are "no defined performance conditions for the payment of commission” to Bina Modi and her "appointment is as combined chairman and managing director”.

"Bina Modi's overall remuneration at 5 percent of the net profits, is deemed excessive. Given the company's size, scale and operation, the total estimated pay quantum is deemed aggressively positioned against industry peers. The company should have provided an absolute cap on the remuneration, the absence of which makes the pay open-ended," added ISS.

In an interview with CNBC-TV18, Samir Modi, the son of Bina Modi, said, “I'm in agreement that the fight needs to end. One way or another, the fight is not good for anybody, not good for the shareholders, not good for the employees. I agree. Whatever it takes to the end the fight. Family fights have no place in the boardroom.”

Modi emphasized that his mother, Bina Modi, who is currently the MD of Godfrey Phillips, should not be on the company board. He stated, "If my father was here today, I see no reason he would disagree with me for not having my mother as the chairman. I completely support my brother; I see no reason why my mother should be there.”

Following KK Modi’s death in 2019, a succession dispute emerged. Bina Modi clashed with her sons, Samir and Lalit Modi. Lalit challenged Bina’s appointment as MD of Godfrey Phillips and sought arbitration. He proposed selling the business and dividing the proceeds, a suggestion Bina Modi opposed.

So far in August, shares of the tobacco player have surged almost fifty percent to set new record highs on most sessions of this month.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.