Samir, Lalit Modi question mother's use of voting rights

Samir Modi and Lalit Modi have questioned the use of shareholder voting rights of their mother Bina Modi, managing director of Godfrey Phillips India Ltd and a member of the company's promoter group.

The brothers fear their mother could take advantage of her control over KK Modi Investment and Financial Services (KKMIFS) through which the Modis own majority of their 48% stake in Godfrey Phillips India to influence her reappointment to the company's board in September, said people familiar with the matter.

The matriarch is locked in a bitter tussle over distribution of the family inheritance with her two sons and grandchildren.



Since she will cross 80 years at the time of seeking reappointment, regulations require such appointments to be ratified through a special resolution in which 75% of shareholders have to vote in favour.

Samir and Lalit Modi believe their mother's control over the family trust that owns shares of KKMIFS besides indirectly owning shares of Godfrey Phillips mean she could vote in favour of resolutions proposing her reappointment at the company's upcoming annual general meeting, the people said.

In a recent communication to Godfrey Phillips India's board, Samir Modi accused Bina Modi of 'unilaterally' voting on shares held by KKMIFS to advance her personal agenda to the detriment of other trustees and beneficiaries, people said. He claimed that his mother was misusing her voting rights and accused other board members of Godfrey Phillips India of acting in concert with her.

Lalit Modi has also demanded Bina Modi's removal as managing trustee of the family trust through a petition filed by his son Ruchir at Delhi high court.

Votes by KKMIFS will be crucial for Bina Modi's reappointment to Godfrey Phillips India' s board.


Philip Morris Global Brands Inc. with 25.1% stake and public shareholders with 27.01% shareholding could also play a crucial role when voting on Bina Modi's reappointment takes place.

Samir Modi and Bina Modi did not respond to ET's queries until press time. Godfrey Phillips and Phillip Morris Global Brands Inc. also didn't respond to queries. Samir Modi's lawyer Simran Singh of Sakura Advisory declined to comment. Bina Modi's law firm Cyril Amarchand Mangaldas too declined to comment. Lalit Modi's lawyer Anuradha Dutt did not comment.

The Modi family trust lays out an equal distribution of inheritance among the successors of late entrepreneur KK Modi after his death.

As per the trust, after KK Modi, his wife Bina and three children – Samir, Lalit and Charu, will inherit his wealth equally. Further, it envisions that after his wife’s demise, her portion of the inheritance will be equally distributed between the children. The inheritance includes shares in over 50 companies that cover the family’s business interests in cigarettes, 24/7 retail, direct selling and industrial chemicals.

In related developments, Samir Modi has been granted protection by a south Delhi court against his removal from Godfrey Phillips India’s board. He claims an orchestrated attempt has been made to remove him and has accused his mother’s personal security officer of assaulting him at a company board meeting on 30 May.

Separately, four directors of Godfrey Phillips India have accused Samir Modi of defaming the company and denied that any assault took place. They have filed lawsuits. The directors that have filed lawsuits include Bina Modi, Lalit Bhasin, Atul Gupta and Nirmala Bagri.

The simmering dispute over KK Modi’s family inheritance stems from the family trust deed executed in 2014. This deed which envisioned circumstances after the demise of KK Modi proposed to the family members two options. If they agreed to continue the trust, then Bina Modi would continue to run the affairs of the trust till further decisions are made by mutual consent of family members. If any family member were to dissent to the continuation of the trust post the demise of KK Modi, then the family’s assets would be sold.

At a family meeting in Dubai on 30 November 2019, Lalit Modi opposed continuation of the trust and demanded dissolution and sale of the family’s assets. He subsequently filed court cases in India and initiated arbitration in Singapore. Samir Modi too has subsequently demanded that the trust be dissolved and split four ways.