‘Even next generation will flourish’: Uday Kotak on Godrej family’s decision to split conglomerate
Uday Kotak, who was one of the key advisors for the split of the Godrej conglomerate, said the Godrej family has “high integrity and quality and even the next generation will flourish”.
Kotak, who is India’s 12th richest Indian with a net worth of $13.2 billion, told CNBC TV18 that he had a close relationship with the Godrej family since 1993. “The Godrej family is known for their high integrity and quality. They have a subtle yet stylish approach to everything they do.”
He added that he has been with the Godrej Group since Godrej Soaps went public. Godrej Soaps was the first company from the Godrej Group that got listed.
He said: “Kotak Bank and I have had a close relationship with the Godrej family since 1993. We had the privilege of taking the first company from the Godrej Group, Godrej Soaps, public. Over the years, we have provided advice on various group and family matters.”
The founding family of 127-year-old Godrej Group amicably split the conglomerate. According to a statement issued by the group on Tuesday night, the conglomerate has been split into two parts with Adi Godrej and his brother on one side and their cousins Jamshyd Godrej and Smita Godrej Crishna on the other.
While Adi Godrej and his brother Nadir will be keeping Godrej Industries that has five listed firms, his cousins Jamshyd and Smita will be getting unlisted Godrej & Boyce and its affiliates and a land bank, including prime properties in Mumbai.
Godrej Industries Group — which includes the listed companies Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet and Astec Lifesciences — will have Nadir Godrej as chairperson and will be controlled by Adi, Nadir and their immediate families.
Godrej Enterprises Group — comprising Godrej & Boyce and its affiliates that have a presence across multiple industries spanning aerospace and aviation to defence, furniture and IT software — will be controlled by Jamshyd Godrej as chairperson and managing director. His sister Smita’s daughter Nyrika Holkar, 42, will be the executive director.
Kotak, along with Cyril Shroff, Nimesh Kampani, and Zia Mody, were top advisors to the Godrej family. The negotiations continued for five long years after which the family reached a consensus on all matters to finalise the split in the Godrej Group.
Under the terms of the agreement members of either group will not be directly or indirectly involved in the management and operations of the entities of the other group. The settlement also makes it clear that shares held by either group in any of the companies will not be transferred to competitors except with the prior permission of the other group, or through a non-negotiated on-market sale.
The Godrej family in the official statement said the split happened as the newer generations have diverse interests and perceptions of growth.
“The third and fourth generations of the Family Branches have diverse interests, and varying perceptions as to, amongst others, the strategic direction, growth and governance of the Godrej Group Entities, the settlement said.
“To preserve mutual respect, goodwill, amity and harmony and to manage diverse expectations and strategic directions desired by each family branch, each branch head acting for himself and on behalf of the other members of his concerned family branch, has agreed upon a family settlement arrangement by way of the family settlement agreement amongst the family branches,” it added.
