The Godrej Group, a 1.76 lakh crore conglomerate that started its industrial career selling locks to the people of a then-crime-prone Bombay, is allegedly in the advanced stages of vital discussions to finalise the official separation of its numerous businesses. The Group began its industrial journey five decades before Independence.
According to the mentioned officials, the two factions of the family—Godrej Industries & Associates, headed by Adi Godrej and his brother Nadir, and Godrej & Boyce Manufacturing Company (G&B), composed of cousins Jamshyd Godrej and Smitha Godrej Crishna—are likely to soon finalise the formal division of business verticals as diverse as engineering, appliances, security solutions, agricultural products, real estate, and consumer products.
The Godrej brand name usage after the split, including potential royalty payments, and land valuations currently owned by G&B, are two crucial issues that the family council is working to resolve.
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Godrej Working on the Legal Issues:
According to those informed of the discussions, legal issues being worked out include the partition of over 3,400 acres of premium land parcels housed under G&B and the untangling of equity cross interests. “On the property parcel, there have been a few problems that need to be resolved. It is challenging to shift the cargo out of G&B because of the tax ramifications, according to an official who wished to remain anonymous. “That presented a difficult task that almost called for arbitration.
The key area of contention has been how the valuation, and consequently an equitable proposition for both parties, would work out. The extremely private family held negotiations cordially, keeping in mind the best interests of all parties concerned, including customers, according to those knowledgeable of the ongoing closed-door discussions. None of the running companies would be impacted by the upcoming split, they added. Until the time of publication, emails sent to the Company and advisors to both branches of the family went unanswered.
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