Rift in Godrej Family: What is the Dispute All About? Read Here
The families have sought the intervention of some of India’s top businessman and lawyers to help resolve the differences, according to reports.
File image of chairman of the Godrej Group, Adi Godrej. (Image: Reuters)
Differences have cropped up among members of the Godrej family over development of the multi-billion-dollar group’s land holdings in Mumbai. The families have sought the intervention of some of India’s top businessman and lawyers to help resolve the differences, according to reports. But what exactly is the issue? Let’s try and understand here:
To start with, let’s first talk about who’s who. Adi Godrej is the chairman of the Godrej Group. Adi and Nadir Godrej are real brothers and control the Godrej Group’s three listed companies Godrej Consumer Products Ltd (GCPL), Godrej Properties Ltd and Godrej Agrovet.
Jamshyd Godrej is Adi and Nadir Godrej’s first cousin. He controls Godrej & Boyce, the holding company of the Godrej Group which is owned by all family members. Godrej & Boyce, meanwhile, holds 4.64% in Godrej Properties and 7.34% in Godrej Consumer Products.
Godrej & Boyce owns a total land parcel of over 3,400 acres in Mumbai. Over 3,000 acre of this land is in Vikhroli suburb, while the rest is in the suburbs of Bhandup and Nahur.
Of the 3,000 acres in Vikhroli, only 1,000 acres can be developed. Another 1,750 acres has mangroves and will not be developed because of environmental concerns, Adi Godrej had promised in 2011. The rest of the area has been encroached upon.
Godrej Properties signed an agreement with Godrej & Boyce in 2011 to develop the land parcel in Vikhroli through a development management agreement. Under this arrangement, Godrej Properties receives a 10% fee of the total revenue generated from the development. The design and construction costs were to be borne by Godrej & Boyce.
According to an estimate, the 1,000 acre land alone is worth Rs 20,000 crore and could be turned into a real estate project worth over Rs 1-lakh crore.
The core issue is that while the Jamshyd Godrej family faction is believed to be against excessive development, Adi and Nadir Godrej of Godrej Properties would like the land to be developed further.
Not being able to find a middle ground, Jamshyd Godrej has reportedly hired Nimesh Kampani of JM Financial and lawyer Zia Mody of AZB Partners, while Adi and Nadir have approached Uday Kotak and Cyril Shroff of Cyril Amarchand Mangaldas to reorganise the landholdings.
Meanwhile, both the sides are expected to issue a statement on the matter soon.
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