Modi House wears a defunct look ever since financial institutions (FIs) rained on the parade of B K Modi and V K Modi. The Modi brothers, the founder promoters of the beleaguered Modi Rubber, had proposed to hike their 13-14 per cent stake in the company to a management controlling stake of 51 per cent by buying out an extra 35 per cent from FIs that had invested in the company. Thereafter, they planned to restructure the management of the company by appointing Alok Modi, son of V K Modi, as the chief executive cum chief finance officer (CEO-CFO) of the company. The FIs, led by IDBI (Industrial Development Bank of India), turned down both proposals and instead insisted on appointing a professional CEO for Modi Rubber.
Denied the CEO’s post—at least for the time being—in the family’s flagship company, Alok Modi is a disgusted man these days. “We wanted to bring the company back into the black through the proposed restructuring, but now it is all up to the FIs—nothing is in our hands,” he mourns. And adds, “It is a question of 5,000 employees who were working with Modi Rubber and are now left in the lurch following the suspension of work at the Modipuram plant (since September 2001).”
In fact, the boardroom drama extends to the family itself. It all started last year when a board meeting under the chairmanship of Pandu Ranga Rao stripped B K Modi of his responsibility of overseeing day-to-day operations at Modi Rubber. B K Modi retaliated by suspending the company secretary, S N Ghosh. Recently, V K Modi announced his intention of selling his stake in Modi Rubber. “It is true that as a family grows, you cannot hold all the family properties together,” says Alok Modi. “But no other business house has been so bogged down in family in-fighting as ours. Since the 1970s, when all business families such as the Ambanis and the Singhanias flourished in leaps and bounds, we went down and down. And I don’t think that we can restore the past glory of the Modi family in the foreseeable future.”
Inspired by the great vision of his grandfather, Alok Modi joined Gujarat Guardian, the float glass manufacturing company owned by his father, V K Modi, as soon as he passed out from engineering college. Now, as a joint director of the company, “Gujarat Guardian has become my first passion,” says Mr Modi. “I expect the company’s turnover will grow three times in the next 10 years. I’m also planning to manufacture automotive and insulated glass at Gujarat Guardian.”
Mr Modi is still on the look out for a growth engine. “But for the time being, I want to concentrate on my glass and travel and tourism businesses,” he says. In the travel and tourism business, he is wife Ritika’s partner in running Uniglobe Travel (South Asia) Pvt. Ltd, a master franchisee of Uniglobe Worldwide in India. “Travel and tourism is going to be the fastest growing and largest foreign exchange earning sector in the country, but the government is still to take sufficient measures to promote India as a tourist destination,” says Mr Modi. “One tries different hands to look for a growth engine and so am I,” Mr Modi says, explaining why he has diversified into so many unrelated businesses such as float glass, travel and tourism and restaurants. He is a Pizza Hut franchisee.
What does Mr Modi do when he is not doing business “I spend most of my time in office, but when I’m at home and not doing business, I watch television or movies. I like watching movies, in any language,” says Mr Modi.