Glass Lewis Takes a Stand Against Bina Modi’s Reappointment at Godfrey Phillips

In a significant move, the international proxy advisory firm Glass Lewis has urged shareholders of Godfrey Phillips India to cast their votes against the reappointment of Bina Modi as Managing Director of the company.

A Controversial Board Situation

Alongside this recommendation, Glass Lewis is also advising investors to oppose the proposal to fill the vacancy left by the removal of Samir Modi from the board. This event has stirred quite the buzz, particularly given the complex family dynamics at play.

• Also read: Delhi Court says Bina Modi should recommend Samir Modi’s appointment to board of Godfrey Phillips India

A Family Dispute Unfolds

The drama within the company escalated back in 2021 when Ruchir Modi, son of Lalit Modi, was ousted from the board after he voiced concerns regarding Bina Modi’s appointment as Managing Director and raised corporate governance questions related to Godfrey Phillips in a letter to the Serious Fraud Investigation Office and the Ministry of Corporate Affairs.

Matters took a more intense turn following an incident on May 30, during which Samir Modi claimed he was assaulted at a board meeting by Bina Modi’s personal security officer. The ongoing family feud continues to be a focal point of concern.

The situation was further complicated last month when Godfrey Phillips made headlines by appointing Charu Modi, Bina Modi’s daughter, to the board, adding another layer of complexity to the family dynamics.

• Also read: Godfrey Phillips family feud: Delhi Court grants relief to Samir Modi

Concerns Over Remuneration and Board Decisions

Glass Lewis didn’t shy away from criticizing Bina Modi’s compensation package either, particularly her commission of 5% of the company’s net profits. They highlighted that this commission lacks any clearly defined performance conditions, raising eyebrows among stakeholders.

Moreover, regarding the decision to keep Samir Modi’s board position vacant, Glass Lewis argued that shareholders should have had the chance to vote on his candidacy, especially following the NRC’s unanimous recommendation against his reappointment. This lack of choice sends troubling signals to investors and raises questions about the governance practices within the company. The firm also pointed out that the company has not provided any public disclosures to support the NRC’s recommendation.

Adding fuel to the fire, it’s important to note that several NRC members, including Lalit Bhasin, a director of Godfrey Phillips and head of the NRC, have filed defamation lawsuits against Samir Modi, which further emphasizes the conflict of interest brewing within the board.

What’s Next?

The upcoming Annual General Meeting for Godfrey Phillips is set for September 6, where these contentious issues are expected to be a key focus. With so much at stake, it will be fascinating to see how shareholders respond to these developments.