- Thursday, May 02, 2024
The dispute could result in Singhania forfeiting 75 per cent of his £1.1bn fortune
By: Pramod Thomas
INDIAN tycoon Gautam Singhania, chairman and managing director of the Raymond Group, is facing potential financial turmoil amid a bitter divorce settlement with his wife, Nawaz Modi.
The high-profile dispute, involving the publicly listed Raymond Group, could result in Singhania forfeiting 75 per cent of his $1.4 billion (£1.1bn) fortune, the BBC reported.
Despite reports of potential settlement talks, sources close to Modi assert that she refuses to accept a lower settlement.
The ongoing mediation involves family members from both sides, and the 75 per cent figure remains on the table. Modi insists on establishing an irrevocable trust to secure the future for her two daughters.
Prominent Mumbai law firm partner Rishabh Shroff notes the increasing use of trusts among wealthy families to shield assets and businesses. Singhania favours a trust where he is the sole trustee, while Modi seeks a co-trustee role with specific rights, according to the report.
Amidst the legal battles, concerns arise about corporate governance at the century-old Raymond Group. Singhania’s alleged domestic abuse towards Modi, highlighted by a viral video and disturbing claims, has raised questions about the company’s leadership.
In response to the allegations, Singhania remained silent, emphasising the importance of maintaining his family’s dignity.
Modi’s accusations, including physical assault and a broken bone, have led to non-cognizable offences filed against Singhania.
Raymond’s independent directors assert their commitment to protecting minority shareholders’ interests. However, unresolved questions persist, particularly regarding Singhania’s ability to manage the company amid personal distractions and potential criminal liability.
While the company’s shares initially faced a decline, they have since rebounded. The dispute has ignited discussions about corporate culture and governance within family-run conglomerates in India.
Despite internal assurances of business as usual, the board’s response and Modi’s whistle-blowing actions have triggered calls for transparency.
Corporate governance experts express disappointment in the company’s handling of the matter and emphasise the need for a thorough investigation.
As the legal battle unfolds, the impact on shareholders and the future ownership structure of Raymond remains uncertain. The complexity of Singhania’s financial position, with a significant stake in Raymond, makes a swift resolution challenging.
Social commentator Shobhaa De highlights the prevalence of domestic violence in India’s wealthiest families, calling it “corporate India’s best-kept secret.” The ongoing legal battle raises broader questions about the independence of board members and corporate culture within powerful entities.
The outcome of this high-stakes divorce settlement could redefine Singhania’s legacy and shape the narrative of corporate governance in one of India’s most prominent conglomerates, the report further said.
In 2019, Gautam had a dispute with his father Vijaypat who accused the son of cheating him out of an exclusive apartment and of unceremoniously kicking him out of the company offices.
