Vadilal promoters sign memorandum of family pact, resolve disputes

This agreement is between the family members, and the company is not a party to the agreement

The promoters of Vadilal Industries — the Gandhi family, which includes Rajesh R Gandhi, Janmajay V Gandhi, and Devanshu L Gandhi, heads of their respective family branches — have signed a new memorandum of family arrangement to resolve internal disputes.

 

On March 29, the families agreed to settle their inter se disputes and expressed their intent to restructure the company’s management, according to a stock exchange filing.

 

The agreement is solely between the family members, with the company not being a party to it. The company also said that it is appointing independent professional management personnel to oversee business operations.

 

 

The promoters also intend to house the ownership of the brand within the company. Currently, the company uses the brand under a non-exclusive licence for a limited period from the promoter group.

 

The stock exchange filing further said that the ice cream major will follow a waterfall mechanism in case of a need for additional funding. The priority will be: first, internal accruals or debt borrowings; second, a rights issue for existing shareholders; and third, a preferential allotment, subject to consent from each family branch.

 

The agreement also grants each family branch the right of first refusal if a Gandhi family member from any branch intends to transfer company shares to a third-party purchaser.