KK Modi Family Trust puts Godfrey Phillips India, other assets, on sale
28 January 2020
The KK Modi Family Trust is reported to have put its stake in Godfrey Phillips India and other family controlled businesses, including wellness brand Modicare, on sale amidst differences among trust members on future management of these assets.
Key promoter entities, led by the KK Modi Family Trust, is the biggest shareholder of Godfrey Phillips India (GPI), which sells the Marlboro brand of cigarettes and is among the country’s largest tobacco product manufacturers.
The K K Modi family members own 47.09 per cent stake in Marlboro maker Godfrey Phillips, while Philip Morris Global Brands, the owner of the Marlboro brand, owns 25.1 per cent.
The decision was made at a meeting of trust members convened by Bina Modi, wife of late K K Modi and her sons – tainted former IPL commissioner Lalit Modi and Samir Modi, and daughter Charu Modi - on 30 November 2019 in Dubai, say reports.
Bina Modi assumed the responsibility of managing trustee as per a provision of the trust deed executed by KK Modi in 2006. Since the meeting could not arrive at a unanimous decision on future management of the businesses, the meeting decided to initiate a process of sale of GPI and 57 other assets.
Acting on behalf of the Modi family trust, Titus Advisors, a Delhi-based legal firm, is learnt to have written to investment bankers, including Credit Suisse, JP Morgan, Goldman Sachs and Morgan Stanley, for initiating the sale process. "There is a possibility that the Trust may consider disposal of its Trust Fund," reports quoted the letter as stating.
The Trust failed to decide unanimously on the management of the trust fund which includes the family controlled business, including whether to continue to own and manage all assets of the trust fund, or sell part of the trust fund comprising of various assets, including family controlled businesses, or to sell the whole of the Trust Fund.
The meeting decided to transfer all family shareholdings into the Trust.
As per provisions of the Trust Deed, a meeting of the trust was required to be held within 30 days of KK Modi’s demise. KK Modi breathed his last on 2 November 2019.
“If the board of trustees is unable to take any decision as stated in clauses 4.1.1 to 4.1.3 above unanimously, then the entire trust fund including all family controlled businesses shall be sold off,” the deed further said.
It also said that the entire the sale has to be concluded within a period of one year and the proceeds be distributed equally between existing members of the Trust.
As per the trust deed, “Mrs Bina Modi shall continue to be the Managing Trustee and shall have complete authority to take all decisions on any matter relating to Trust Fund, including family controlled businesses and her decisions shall be final and binding on all the beneficiaries and Trustees provided that it has been agreed to continue to keep the Trust and not dispose of all the assets.”