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BW Businessworld

Underworld Threat Deters Lalit Modi From India Return, Says Father

Modi Group chief K.K. Modi slams government decision to require cigarette manufacturers to put large graphic warnings on packs

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K.K. Modi, group chairman of Modi Group, is as critical about his fugitive son Lalit Modi as he is about the lawmakers of the country. Modi says that the Indian Premier League is not the same as it was during its founding years that was spearheaded by Lalit Modi. He says that his son is defending himself internationally while the threat to him continues.

"As far as Lalit is concerned, he is defending himself internationally, as and when he gets clearance from the lawmakers, he will be back. The threat from the underworld continues and he doesn’t feel safe here in India. Last time when he was here they removed all security," K.K. Modi said.

The Modi Group chief talked to BW Businessworld about a number issues, including the recent government decision making it mandatory for cigarette companies to cover 85 per cent of the cigarette pack with pictorial warning on both sides.

Companies like K.K. Modi’s Godfrey Philips oppose the decision. Modi says this move will only allow illicit players and affect the economy and unemployment negatively.

Lalit Modi is credited with turning the Indian Premier League into one of the world's richest cricket championships. He is living in London after fleeing India when authorities in 2010 raided his premises in a money laundering and tax evasion case.

K.K. Modi spoke about betting in cricket and how this problem has been recognised by the Supreme Court. The Lodha Committee has given a report on the issue but its recommendations are yet to be implemented. The industrialist points out that his son’s problem is that he is very vocal. "He expresses his views (freely), which a public figure should not do. If I say something, people raise fingers and trace it back to him which is very unfortunate," Modi said.

On the issue of smoking, Modi said cigarettes being the most highly taxed item, in every budget the Finance Minister levies heavy taxes on the product. "That is why the smuggling is increasing, there are lobbyists of the smugglers as well, and they do the transactions in cash. It is vicious cycle, a cycle that can be broken only if the government says that we are ready to make the taxation moderate, make packaging similar to what is coming from the foreign countries and let consumers buy the brand of their choice. Allow FDI in the sector and foreign brands to make way into the market," Modi said.

India's Supreme Court has ordered tobacco companies to comply with the new government rule, which would put India among the countries where cigarette packs carry the most graphic warnings. The tobacco industry is estimated to suffer a loss of around $68 million (nearly Rs 452.4 crore) a day due to new health warning rules set by the government.

"We are unable to understand what is the rationale behind this, the loss incurred by us will be recurred in few months, consumers will continue to smoke, our concern is illicit cigarette trade will be up and our brand imagery will be marred," said Modi.

He said Rs 9,000 crore worth of cigarette are being sold without taxes being paid. Modi group’s flagship brand is Godfrey Philips that produces cigarette brands like Four Square, Red and White, Cavender's, Tipper and North Pole. Godfrey Phillips India also manufactures and distributes the iconic Marlboro brand.

Talking of bans in the country in general, be it beef ban or the curbs on diesel cars and alcohol, Modi believes India is moving in the wornd direction.

"Instead of a freer world, governments are making it a regulated world, bans are ineffective for the end consumers as it is for the tax collectors whose pockets are only deepened through illegal means."

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