Over five years, the two investors pumped over Rs 445 crore into the venture. It launched ‘CheriO’ fruit beverages, ‘DND’ household insecticides and chocolates under the ‘LuvIt’ brand.
GCPL followed an asset-light model. While the company owned the product and handled marketing, manufacturing was contracted to a third party.
Net sales rose to over Rs 90 crore within three years of operations and stayed in the Rs 90-110 crore range subsequently. By fiscal 2018, the company had racked in losses worth Rs 328 crore.
Around that time, the corporate marriage started coming apart.
In January 2018, Mahendran stepped down from an active management role. The specific reasons are not known. When asked whether 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 the condition of anonymity out of employment concerns, internal politics between representatives of the private equity firms and the management made it difficult for Mahendran to stay.
Mahendran wouldn’t confirm. He distanced himself from the company starting 2018, he said. “I was inactive from January 2018, though officially on documents it could be June 2019.”
By 2019, his shareholding was down to 0.71%. The amended share-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 investors was for six years. Yet, it went sideways after three years and Mahendran decided to exit. He agreed to amend the share-purchase agreement, which released 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 among shareholders that was not discussed at the board level. He was given an honorable exit, the insider said, requesting to remain unnamed citing business reasons.
In an emailed response to BloombergQuint, a Goldman Sachs spokesperson “declined to comment” on the queries raised to its nominee director Sriram Kumar.
Similar email queries to the two nominee directors—Hiroaki Sagane and Atsushi Fujii—of Mitsui Group remained unanswered.