Godfrey Phillips to Exit 24Seven Retail Business After Court Ruling

Godfrey Phillips India Ltd, a prominent cigarette manufacturer, announced plans to exit the retail business under the '24Seven' brand. This decision follows the lifting of an interim injunction by a district court in New Delhi. The injunction was initially issued on June 27, 2024, after an application by Executive Director Samir Kumaar Modi.

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The District Judge of South-East District at Saket Court, New Delhi, has now set aside this injunction. Consequently, Godfrey Phillips India is proceeding with the Board of Directors' decision made on April 12, 2024. The board had approved exiting the retail business division operated under 24Seven, pending necessary formalities.

Board Decision and Legal Proceedings

On April 12, 2024, the company's board decided to exit the retail business division. However, an ex-parte ad interim injunction order was issued by the District Judge of South-East District at Saket Court on June 27, 2024. This order directed the company to maintain the status quo regarding its retail business.

The following day, legal counsel for Samir Kumaar Modi served a copy of this order to Godfrey Phillips India. Despite this, the recent court ruling has allowed the company to move forward with its plans.

Financial Performance and Strategic Considerations

For FY23-24, revenue from operations in the retail business division was Rs 403 crore. This accounted for 7.6 per cent of the company's total revenue from operations. However, as of March 31, 2024, the retail business division had a negative net worth.

The company stated that after considering stakeholder feedback, long-term performance since inception, current market conditions in the retail sector, and its long-term business strategy, the board decided to exit from this segment.

Internal Disputes and Allegations

Samir Modi has been involved in a boardroom dispute with his mother Bina Modi. He accused her of orchestrating an attack on him during a company board meeting. Samir Modi filed a complaint with Delhi Police alleging that he was prevented from participating in the May 30 board meeting by Bina Modi's PSO and was injured after being assaulted.

Godfrey Phillips India is part of Modi Enterprises and produces popular cigarette brands like Four Square, Red and White, Cavanders, Tipper and North Pole. It also manufactures and distributes Marlboro under a licence agreement with Philip Morris.

The company is now taking steps according to the Board of Directors' decision on April 12, 2024. This move aligns with their long-term strategy and market conditions.