KK Modi family feud: Views split over valuation of four key companies

Samir and Lalit Modi, who are sons of the late industrialist K K Modi and are in a dispute with their mother, Bina Modi, have valued the share of the family in the trust through which it controls four key companies of their group at over Rs 29,000 crore.

The companies include flagship Godfrey Phillips India (GPI), Indofil, Modicare, and Colorbar.
 

The valuation, however, is far higher than what the trust has made — around Rs 12,000 crore.
 

Samir has offered a binding agreement to sell his 25 per cent share (the four members of the family — Bina, Samir, Lalit, and Bina’s daughter, Charu — have 25 per cent each in the trust) in the trust.

The key question would be on what the fair value of the shareholding is.
 

According to the senior management of the K K Modi group, in which Samir is executive director in GPI, the valuation of the four companies came to around Rs 29,644 crore.
 

In terms of a valuation done by Grant Thornton, Modicare was valued at Rs 819 crore and Colorbar at Rs 800 crore. Based on market capitalisation, GPI’s value is Rs 19,000-20,000 crore, of which 47 per cent is with the trust, while that of Indofil was valued at around Rs 10,500 crore.
 

The value also includes Phillip Morris India, the marketing arm in which GPI, along with the family, owns 50 per cent. It has declared a dividend of Rs 706 crore.
 

Bina is the trustee of the K K Modi Trust. She has made it clear she is willing to buy out her sons’ shares in the trust but will not sell the legacy of her departed husband.
 

Sources in the camp of Bina and Charu say they do not want to sell the legacy of K K Modi. Nor are they aware of the Grant Thornton valuations. Bina was not willing to comment on the difference in valuation because the matter is sub-judice.

Samir too declined to comment.
 

The battle in the family came out into the open when GPI announced it had decided to exit the convenience-store retail business, 24Seven, run by Samir.
 

The matter was aggravated with Samir alleging he was assaulted while he was entering an audit committee meeting and was allowed to do so only after he made a noise.
 

Samir has filed an FIR, alleging it was orchestrated by her mother with the consent of the board.
 

A spokesperson for GPI, however, said Samir was not invited to the meeting and he wanted to barge in.
 

The person said as the discussion was on the exit of GPI from 24Seven Samir was an interested party because he ran the company.