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Lalit Modi’s son Ruchir seeks SFIO, Sebi probes into Godfrey Philips

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MUMBAI: Family disputes in the KK Modi Group that owns Godfrey Philips India has reached a tipping level with Lalit Modi’s son and a director of the second largest tobacco maker Ruchir writing to the company affairs ministry searching for an SFIO and Sebi probe alleging critical company governance points and different malpractices within the firm.

After KK Modi’s death on November 2, 2019, his son Lalit Modi, who’s now a fugitive in London, had sought sale of the household property below the phrases and situations of the belief deed executed by his farther, which envisages sale of property if there may be lack of consensus among the many relations/trustees.

Since he couldn’t agree together with his mom Bina Modi, who’s the president and managing director of Godfrey Philips, and brother Samir and sister Charu Bhartia, he filed for arbitration in Singapore, which is pending now.

Ruchir Modi instructed that he wrote to the company affairs ministry searching for an SFIO (Serious Frauds Investigation Office) probe into “serious irregularities” within the operating of the corporate. He additionally sought a Sebi probe for violations of the itemizing norms and lack of different company governance within the firm.

In a letter he factors out that his grandmother Bina nonetheless runs the corporate because the president and managing director regardless of her ouster by public shareholders.

“The manner in which she has been appointed as president reeks of fraud and flagrant disregard and violation of statutory provisions. This also shows the failure of corporate governance at the company,” says the letter.

The letter says Bina’s appointment was rejected by public shareholders however was fraudulently proven as accredited by majority shareholders with the votes of the promoter shareholders, which is in violation of the Companies Act.

While an e mail despatched to Godfrey Philip stays unanswered, Ruchir instructed that he has written to the ministry and raised sure key points with the enforcement companies in relation to the corporate.

According to the letter, the genesis of the dispute dates again to the November 30, 2019 assembly of the trustees of the KK Modi Trust.

According to the belief deed, the 4 trustees — his spouse Bina who routinely turns into the chair of the belief, sons Lalit and Samir and daughter Charu Bhartia — have to fulfill inside 30 days of the belief deed coming to drive on the demise of KK Modi, and likewise if the trustees failed to succeed in unanimous choice on any points in operating the corporate, inside a 12 months the property of the corporate and the household belief must be bought.

The trustees assembly, held on November 30, 2019 in Dubai, ended with out taking any decision as Lalit Modi was not prepared for extending the assembly or permitting Bina to run the corporate and accordingly referred to as for funding bankers to evaluate the worth of the household property for gross sales.

But the letter says in the mean time Bina, who’s over 70 and has no expertise in operating an organization, received herself appointed as president, MD and CEO of Godfrey, on November 14, 2019 for a five-year tenure, creating additional rift.

Lalit and Ruchir Modi disputed her appointment and subsequently filed for arbitration in Singapore.

However, Bina moved the Delhi High Court difficult the jurisdiction of the Singapore arbitration tribunal to adjudicate on a matter like this. But a single decide bench of the HC dominated in opposition to her in March following which she sought a assessment in a two-judge bench, which concluded the listening to final month and the judgement is awaited any day now.

On the household belief dispute and the continued arbitration, Ruchir instructed that “the Singapore arbitration is a sub-judice matter and also currently under consideration before the Delhi High Court, and we are hoping it will be resolved soon”.

The letter additionally questions the functioning of the unbiased director Lalit Bhasin and likewise the position of firm secretary Sanjay Gupta who have been accused of all of the clandestine strikes for the November 14 board assembly.

The letter additionally claims that Bina’s appointment was not correctly disclosed to the Sebi and the inventory exchanges or to the shareholders therefor the necessity for Sebi probe.

The letter additionally says a number of letters searching for particulars of the board assembly weren’t replied to by the corporate even at the moment.

Ruchir has additionally written to Ashok Kumar Dixit, the director of the Institute of Company Secretaries of India, searching for disciplinary motion in opposition to the corporate secretary Sanjay Gupta for his skilled failures and misconduct. In a 13-page letter, he’s accused {of professional} misconduct and subsequently motion by the institute.

Godfrey Phillips India was initially established in London in 1844 and was one of many first British firms to mass-produce cigarettes, and likewise one of many founders of Imperial Tobacco Company.

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