Mumbai: There is a fresh trouble brewing among the family members of over a 100-year-old Indian conglomerate Godrej Group. Differences have emerged among them over future business strategy and the development of a prized Mumbai land parcel. In addition, the friction over direction of the future of India’s oldest business houses, another subject of disagreement between family patriarchs Jamshyd Godrej and Adi Godrej is also a 1,000-acre plot in Mumbai’s Vikhroli suburb. To resolve the causes of rift emerged in the highly-esteemed Godrej family, they have sought the intervention of some of India’s key businessmen and lawyers, people intimately familiar with the matter told the channel.
Jamshyd Godrej, who has the controlling stake in the unlisted Godrej & Boyce, has roped in banker and industry veteran Nimesh Kampani and lawyer Zia Mody as advisors while real brothers Adi and Nadir Godrej have asked Kotak Mahindra Bank’s Uday Kotak and legal veteran Cyril Shroff for seeking solution. The people quoted above, who spoke on the condition of anonymity, said the advisors are tasked to discuss the points of differences between the two and help parties reach acceptable solutions.
“With the involvement of legal eagles, the matter is no more a family matter,” one of them said. Godrej Group, set up in 1897 by Ardeshir Godrej, has revenue of over $5 billion with interests spanning from real estate to fast moving consumer goods. The two brothers Adi and Nadir Godrej control the group’s three listed companies, namely; Godrej Consumer Products Ltd (GCPL), Godrej Properties Ltd and Godrej Agrovet. Jamshyd-controlled Godrej & Boyce has 4.64% stake in Godrej Properties and 7.34% in GCPL. Meanwhile, Adi’s cousine Jamshyd Godrej and family’s trust owns 8.66% in Godrej Industries.
The group, as explained above, is intertwined as most family-owned businesses in India have been since their beginnings. The differences have emerged as the family grew in size, younger generation joined the ranks and leadership styles differed. “As families grow, they have to evolve a long-term strategy for growth,” said another person, who is directly involved in the negotiations. Godrej Properties, listed in 2010, has claimed to have sold real estate worth over Rs 5,000 crore in 2016 alone. Adi Godrej is chairman of the company and his son Pirojsha Godrej is executive chairman.
As part of the family arrangement reached in 2011, the land parcel in Vikhroli owned by Godrej & Boyce but is ‘co-developed’ with Godrej Properties who receives a 10% fee of the total revenue generated from the development. The design and construction costs borne by Godrej & Boyce. Godrej & Boyce has a total land parcel of 3000 acres, nearly two-thirds of this land is covered in mangroves and hence cannot be developed as these trees act as “lungs” of India’s financial capital.
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