In a move to professionalise its business structure and carve out a clear succession plan, the KK Modi group today announced formation of a family council headed by Bina Modi, wife of KK Modi, and a corporate centre under former Indian Oil Corporation chairman Sarthak Behuria.
All the group companies and divisions would be controlled by the corporate centre with chief executive officers reporting to Behuria who will be the group president. The family council will provide an interface between the Modi family and the management. Group chairman KK Modi, daughter Charu Modi Bhartia and sons Lalit Modi and Samir Modi are also part of the family council.
The group that is aiming at $5 billion in market capitalisation over the next five years, has a diversified portfolio of businesses, including tobacco giant Godfrey Phillips, agri-chemicals and speciality chemical company Indofil, 24x7 retail, besides being present in education, entertainment and restaurants.
The corporate management council (CMC), which will be the apex decision-making body will act as a forum to make strategic business decisions in consultation with other promoters. It will be chaired by 70-year-old K K Modi and comprise family members and independent directors.
The existing governance structure of the boards of all the companies, executive and steering committees will continue with the CEOs having the single-point authority and accountability for each operating company.
At the group level, there will be a corporate executive committee (CEC) chaired by Behuria comprising senior directors, chief executive and operating officers including Godfrey Phillips CEO Surinder Seru, Indofil CEO R K Malhotra, Modicare CEO Amrish Anand, and Modi Academic International Institute head Sukanta Dey.
Bina Modi as chairperson of the family council will have a key role in aligning the long-term interests of family members. A statement issued by the group said she would play an instrumental role in mentoring the next generation and “enable succession planning for long-term continuity of the group”. She will take over as the managing trustee of the family after the active involvement of chairman K K Modi. She will play a key role in bringing about consensus on how the group will be managed by the next generation of promoters.
Behuria, who has been in the petroleum sector, appears to be an odd choice since the group is not into energy, but company insiders say he has been chosen for the experience in managing large companies such as Indian Oil Corporation and Bharat Petroleum Corporation. “I am looking forward to the new assignment with renewed vigour. The corporate centre will play a significant role in driving synergies and best practices within the group whilst supporting the operating companies with strategic direction, leadership development, resourcing/financing and driving major growth initiatives,” he told Business Standard.
Announcing the new structure, group chairman K K Modi said, “As we embark on the next phase of growth, it is important that we professionalise the group and have the family members play a key role in helping us achieve our aspirations.”
The family will serve on the boards of the different operating companies in executive positions, providing direction to the respective companies. Currently, Charu Bhartia is the vice-chairperson of MAII and is a director on Indofil, a Mumbai-based chemical company. Samir Modi will continue to manage the cosmetics business under the brand of Colorbar Cosmetics and also the retail business.