JASMINDER SINGH REFUTES HIS BROTHER’S CLAIMS OF BEING GROOMED TO TAKE OVER AS HOTEL EMPIRE CEO
By Sarwar Alam
BILLIONAIRE businessman Jasminder Singh has denied claims that his younger brother was being “groomed” to take charge of his hotel empire and asserted that the Edwardian Hotels Group was run on merit, not nepotism.
Giving evidence in court during the past week, Singh, 66, also denied any discussion took place with his father relating to installing his sibling, Herinder, 50, as the CEO of the hospitality business or indeed in any senior management role in the company.
Herinder Singh’s barrister Justin Fenwick QC told the court that Jasminder Singh told his younger brother that they were “50-50 partners” and would “work together to build the company”.
“I’m trying to stay calm here,” responded Jasminder Singh. “That just did not happen!”
He told the court that he had built the Edwardian Hotels empire over the past four decades with the firm belief that “advancement and promotion was based on merit and not just because you are a family member”.
Jasminder Singh founded the Edwardian Group in 1975 and has been its chairman and CEO since then. He was described in court by his brother Herinder Singh as being the “driving force behind the Edwardian Group since its inception”.
The Edwardian Group owns 13 luxury hotels, with properties in central London. Work on a new hotel is underway at Leicester Square and it is set to open in 2020.
Jasminder Singh’s family wealth has been estimated to be £1.5billion in the 2017 Asian Rich List, published by Eastern Eye.
At the Chancery division of the high court, Jasminder Singh refuted suggestions from Fenwick QC that he had always “hoped” his brother Herinder would join the family business and would have a lengthy career in a “senior management” level.
“I never regarded family and business as the same thing,’ said Jasminder Singh. “It was the expectation of my parents and Herinder that he would join the business; it was never my expectation.
“I never had any discussions with my father or Herinder about him joining the company or his role within the company.”
Jasminder Singh added: “Was I hoping he would join the company? No. Did I expect him to join the business? That was purely based on if he wanted to join the company. That was his decision. I did not hold any hope. He had the option, like all Singh family members did that if they had the skills and showed the aptitude, they could join the business.”
Fenwick QC responded, saying: “Are you Mr Singh telling me that your parents never spoke to you about their little boy joining the family business? All the times you sat round the dinner table, the conversation never came up?”
“I can categorially state no such discussions took place,” said Jasminder Singh.
“Father would have liked him (Herinder) to do something different. He wanted him to start his own business. But once Herinder had decided he wanted to join the business, my parents put pressure on me.
“I thought it would have been better for him to go out on his own and get adequate experience from either the accounting or commercial world. But he was desperate to join the company. At that stage in his life he had no other options in his mind and that’s why he joined the business. Once he decided to join, I had pressure applied on me by my father and mother and I relented.”
Herinder Singh, 50, was made a director in 1986 and joined the business as an employee in 1992. He held positions as a junior in the accounts department, head of internal audit and director of marketing. He left as both director and employee in 2010 after falling out with Jasminder Singh.
The court that in 1992, when Herinder Singh joined the Edwardian Group, Brtain was in the midst of recession, the housing market had collapsed and Edwardian Group was in danger of going bust. Jasminder Singh negotiated with the banks to restructure the company and ensure its future.
Fenwick QC suggested that Jasminder Singh would have been “happy” to have Herinder Singh, a chartered account, on board at the time to help negotiate with the banks.
“Not true,” said Jasminder Singh. “He (Herinder) was newly qualified and had just been made redundant. He was a junior in the (Edwardian Group) accounts department. How would he have made a huge difference to the company? Was he going to somehow save the company?”
Jasminder Singh also said that the banks didn’t want Herinder Singh and his parents to be kept on as directors, employees or financial shareholders because of the cost to the company. They objected to the overall cost to the company in terms of remuneration, the court heard.
“The banks wanted to figure out how he (Herinder) added value to the company,” said Jasminder Singh. “But my brother and parents were important to me. I wanted to look after them economically.”
Herinder Singh stayed on as an employee and director.
When the Edwardian Group was restructured in 1993, Jasminder Singh worked with the banks to ensure the financial security of the Singh family’s future. He created 12 trusts in Jersey consisting of Edwardian Group shares. Four of these trusts were for his family, four for Herinder Singh’s family and four were earmarked for either his family or current and future Edwardian directors and employees. Herinder Singh’s trusts equated to 22 per cent of the Edwardian Group shares.
Under Jasminder Singh’s leadership, the Edwardian Group overcame their financial struggles and bought back the shares and assets which the banks had taken control of during the restructuring process, the court heard.
In a Memorandum of Wishes (MOW) created in 2000, Jasminder Singh stated his future intentions for the company. He advised the directors and trustees that, in the event of his death, of the two key positions of financial director and CEO, one should be independent of the Singh family.
Fenwick QC claimed that this allegedly pointed to Jasminder Singh wishing for a family member, namely Herinder Singh, to become CEO.
“That is a huge jump!” said Jasminder. “Singh family member could have meant Inderneel (Jasminder’s son). If Herinder was not fit for purpose, under performing, how could he be CEO. Directors, trustees, the banks and an independent review would decide who was made CEO.
“Advancement within the company has always been based on merit and not if you are a Singh family member.”
Fenwick QC claimed Jasminder Singh had groomed Herinder Singh from a young age to take over the business and had referred to him as “Prince of Wales”, symbolising his desire for Herinder Singh to inherit the position of CEO.
Jasminder Singh dismissed the claim he had referred to Herinder as “Prince of Wales”, adding: “He (Herinder) had been in charge of internal audit and marketing. These were no senior executive positions and he had had a lot of scaffolding and support in these positions. “It was not a given Herinder would be CEO, a long-term director or executive. It was purely down to performance. Behave properly (Jasminder had written official letters to Herinder telling him to improve his behaviour with staff). He had to earn that position on a daily basis. He wasn’t going to be given that position just because he was a family member.
“I don’t think he (Herinder) had the desire or work ethic to take over as CEO. If there was premature death on my part, it would have been absolutely wrong for Herinder to take over just because he was my brother. He didn’t have the skills to be CEO.”
In his MoW, Jasminder Singh also stated he wanted his parents to be kept on as directors in the case of his death and be remunerated for their positions.
Jasminder Singh said: “They had lost their pension fund through the collapse of BCCI and hadn’t recovered it sufficiently. I wanted to make sure mum and dad would not be disadvantaged if something happened to me.
“My father and mother had a hard life. My father worked long hours for the East Africa Railway while I lived with my grandparents in Nairobi. They worked very hard and I wanted to show I valued and appreciated everything they had done and wanted to take care of them.”
Jasminder Singh said Herinder worked on getting their parents on the latter’s side and that Herinder the “architect’ behind his late parents taking Jasminder Singh to court in 2013 for a share of his wealth.
“Since 1998/99, he (Herinder), his father-in-law and my sister Seema have been working to create maximum mischief and get the maximum Singh family wealth. They were trying to take my wealth even though I have been so generous to them.”
The trial continues.
