Godrej Group has started a formal process to split the business into two groups comprising the families of Adi Godrej and brother Nadir and their cousins Jamshed Godrej and Smita Godrej Krishna. According to a report in the Economic Times, discussions have been going on for months to restructure the $4.1 billion group, but it has gained momentum only recently.
Adi Godrej’s son Pirojsha Godrej represents one side, while Jamshed represents the other side, along with Godrej & Boyce’s Chief Financial Officer, Purvez Kesari Gandhi. The external consultants being consulted for the restructuring include Nimesh Kampani, Uday Kotak and AZB & Partners legal experts Zia Modi and Cyril Shroff, the report said.
Godrej Industries Limited (GIL) and Godrej & Boyce told ET in a joint statement, “The Godrej family has been working on a long-term strategic plan for the group for the past few years to ensure the best value for its shareholders. As part of this campaign, we have also sought advice from external partners. These discussions are ongoing among the family as well.”
A final decision on the matter is expected in the next six months. There is likely to be a complete division of property on a large scale. The report, citing people close to Adi Godrej, said that while the head of the family would prefer no change, the younger generation wants more clarity on the ownership of the property.
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Apart from Godrej & Boyce, which is a private entity, other group firms such as GIL, GCPL, Godrej Properties and Godrej Agrovet are all public and are controlled by a group led by Adi Godrej and Bhai Nadir.
This information came to the fore after Adi Godrej stepped down as chairman of GIL to serve as chairman of Godrej Group and honorary chairman of GIL. His brother who was the Managing Director took over the post.
Over the years, Adi Godrej’s three children were given more control of the group business. His eldest daughter Tanya Dubash is the Group’s Executive Direct and Chief Brand Officer. Son is the director of Godrej Properties, the real estate arm of the Pirojsha Group and the youngest daughter Nysa Godrej is the chief of Teh Group’s largest company GSPL.
controversy behind partition
Now the question arises that why such a big family is now dividing such a big business? Actually in 2019, a news came out, in which a dispute started in the Godrej family over 1000 acres of land in Vikhroli area of Mumbai. There are also deep differences in the family regarding the business strategy and the role of the new generation in it. Due to this, this family discord increased with time.
But this division of business is not as easy as it seems, because there is a lot of cross-holdings between family members and family trusts and these need to be segregated. For these reasons it can be said that it is a complex division.
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