Over five years, the two investors have injected more than Rs 445 crore into the company. It launched “CheriO” fruit drinks, “MDN” household insecticides and chocolates under the “LuvIt” brand.
GCPL followed a light asset model. While the company owned the product and took care of the marketing, the manufacturing was outsourced.
Net sales reached over Rs 90 crore in three years of operation and remained in the Rs 90-110 crore range thereafter. In fiscal 2018, the company recorded losses worth Rs 328 crore.
Around this time, the corporate marriage began to unravel.
In January 2018, Mahendran stepped down from his active management position. The precise reasons are not known. When asked if the separation was acrimonious, all Mahendran was willing to say was, “It was an exit by design.”
According to a company executive, who spoke on condition of anonymity for employment reasons, internal politics between representatives of private equity firms and management made Mahendran’s stay difficult.
Mahendran would not confirm. He distanced himself from the company from 2018, he said. “I was inactive from January 2018, but officially on the documents, it could be June 2019.”
By 2019, its stake had fallen to 0.71%. The amended stock purchase agreement between him and the two investors, reviewed by BloombergQuint, provided for the termination of his rights and obligations.
The initial agreement between Mahendran and the investors was for six years. Still, it turned sour after three years and Mahendran decided to come out. He agreed to modify the share purchase contract, which freed him from all rights and obligations.
Another board insider who spoke to BloombergQuint said Mahendran’s exit may have been performance-related. But it was a decision between shareholders that was not discussed at the level of the board of directors. He got an honorable exit, the insider said, asking to remain anonymous citing business reasons.
In an emailed response to BloombergQuint, a Goldman Sachs spokesperson “declined to comment” on questions posed to its director named Sriram Kumar.
Similar questions via email to the two appointed directors – Hiroaki Sagane and Atsushi Fujii – of the Mitsui Group remained unanswered.