As a child in London, one of Karam Hinduja’s favourite pastimes was watching Bollywood movies with his grandfather Srichand Hinduja, the patriarch of a sprawling global business empire.
“He and I, without fail, once a week, whatever was new, whether it was good or bad,” Karam said in a recent interview in Geneva. “That’s a lot of how we bonded.”
Little did he know then that a quarter century later the two of them would be embroiled in a real-life family drama more gripping than any Bollywood plot. And unlike most of the tearjerkers they watched, this one may not have a happy ending.
Karam Hinduja, his sister, mother, aunt and grandmother are locked in a battle with the rest of the Hinduja family over pieces of the $US18 billion British-Indian group.Credit:Bloomberg
His grandfather, SP as the 85-year-old is known, now suffers from a form of dementia, and Karam, his sister, mother, aunt and grandmother are locked in a battle with the rest of the Hinduja family over pieces of the $US18 billion ($25 billion) British-Indian group. Karam’s side of the family is effectively asking for what was once unthinkable — the group’s assets to be broken up. SP’s three brothers, Gopichand, Prakash and Ashok want the group to stick to its age-old motto that “everything belongs to everyone and nothing belongs to anyone.”
As clashes pile up in courts in London and Switzerland and the SP side suggests misogyny may be driving actions against his daughters, there may be no going back. The increasingly bitter feud has raised the possibility of a messy unravelling of the 107-year-old group, putting at risk one of the world’s largest conglomerates. With dozens of companies — including six publicly traded entities in India — the closely held Hinduja Group employs more than 150,000 people in 38 countries in truck-making, banking, chemicals, power, media and healthcare.
“They seem to have reached a point of no return,” said Kavil Ramachandran, a family-business expert at the Indian School of Business. “It’s most unlikely to go back to the socialistic philosophy of everything for everybody.”
Founded by their father Parmanand Deepchand Hinduja in 1914 in the Sindh region of British India, the one-time commodities-trading firm was rapidly diversified by the brothers, with early success coming from distributing Bollywood films outside India. The group’s heady rise let them rub shoulders with the likes of former US President George H.W. Bush and UK Prime Minister Boris Johnson. In London, they are Queen Elizabeth’s neighbours, sharing Carlton House Terrace — four interconnected Georgian houses down the street from Buckingham Palace — where they hold their annual star-studded Diwali bash. SP and Gopichand, UK citizens, are among the wealthiest men in Britain.
With a collective net worth of about $US15 billion, the four brothers always presented a united front, with little to suggest that not all was well in the House of Hinduja. Until last year. That’s when a London judgment shed light on the conflict in the family. Gopichand, Prakash and Ashok were defending the validity of a letter signed in 2014 by the four brothers stating that assets held by one belong to all. That came as SP — represented by his daughter Vinoo — claimed sole ownership of Geneva-based Hinduja Bank.
SP wants the London court to rule that the letter has no “legal effect.” A decision on that is not due for a while yet, but if he succeeds, assets in his name could pass to his daughters Vinoo and Shanu on his death. Meanwhile, a court in the Swiss canton of Lucerne said the case between SP and his brothers is on hold, pending a decision on who will represent his interests.
Although the Swiss bank is a tiny part of the family’s overall assets, the case raises broader ownership questions. The three brothers frame it as a power grab by SP’s daughters, who they said are using their father’s weakened state to go against his long-held wishes.
The mansion belonging to the Hinduja brothers on Carlton House Terrace in London, just down the road from Buckingham Palace.Credit:Bloomberg
“SP had one mantra that nobody owns anything, everybody owns everything,” Radhamohun Gujadhur, an adviser to the brothers, said in an interview. “Anyone doing differently is speaking under their own illusions or to further a selfish private agenda. The group structure has withstood the challenges of Shanu and Vinoo Hinduja who disagree with their own father’s vision of the group.”
Shanu didn’t want to comment on the dispute while Vinoo declined requests for comment. Ashok said he couldn’t comment on the record. Charles Stewart-Smith, a spokesman for the brothers, declined interview requests, referring to an earlier statement by them saying the efforts “go against our founder’s and family’s values.”
Another London lawsuit from 2018 shows how the feud could touch other family assets. That fight was over $US1 billion in assets held at the Swiss bank by a company tied to Ashok Leyland, one of the group’s most high-profile listed companies and the world’s third-largest manufacturer of buses.
Opaque holding structures — through trusts and offshore entities — make it difficult to determine ownership of the conglomerate’s companies. For instance, the brothers’ shares in IndusInd Bank in Mumbai, among the largest privately-owned banks in India, are held in an entity registered in Mauritius. Even the brothers’ domiciles complicate matters. SP and Gopichand live in London, Prakash resides in Monaco, and Ashok in Mumbai.
The group’s organisation that worked for the brothers may not for third and fourth generation Hindujas now taking the reins.
“These old structures in the new world that they’re in are going to come apart,” said Nigel Nicholson, a professor at London Business School and author of ‘Family Wars.’ “The notion that one can maintain unity with woolly notions of common ownership without clear governance structures is tricky.”
For instance, SP’s 31-year-old grandson Karam, appointed the Swiss bank’s CEO last year, has a different take on the ownership of his firm.
“SP is the founder and has always been the sole shareholder and continues to be of this institution,” he said. “In the absence of an overarching agreement, members of our family have individual shareholdings.”
Ashok Hinduja wants the group to stick to its age-old motto that “everything belongs to everyone and nothing belongs to anyone.” Credit:Peter Morris
The brothers’ adviser disagrees.
“The Hinduja group doesn’t have any individual ownership and this includes the bank,” said Gujadhur.
Karam has renamed the bank SP Hinduja Banque Privee, although on the Hinduja Group website it is still called Hinduja Bank Switzerland. Housed in a modest building at the foot of Geneva’s old town, the bank headquarters has a simple blue door and a small brass plaque engraved with its new name. In the interview there, Karam said he can appreciate that the timing of the bank’s re-branding may seem provocative given the ongoing legal battle. But the board endorses the move and it reflects the legal status quo, he said.
The bank is small by Swiss private banking standards, with about 2.43 billion Swiss francs ($3.6 billion) in client assets. Nevertheless it has become a lightning rod for the dispute, with Karam hinting that the fight has tinges of misogyny since the SP branch is dominated by women.
“It’s shocking; I simply cannot understand the animosity that exists toward the SP branch of the family,” the Columbia University graduate said. “It makes you wonder how even such wealthy and somewhat Westernised and powerful individuals, what their views truly are, maybe, toward women. I don’t know. It’s all I can think of.”
Karam’s mother, Shanu, who is the Swiss bank’s chairwoman, said her ascension at the firm is “instructive,” showing her father’s opposition “to the sidelining of women.”
Traditional Indian family businesses often keep daughters out of key roles, but for the brothers’ adviser, Karam’s accusations of misogyny are flat-out wrong. Vinoo and Shanu are on the boards of several of the group’s companies, and “if there was any truth to those misogyny claims I don’t think they would have been named to those boards,” he said. The sisters were removed last year from all their directorships of Group companies aside from the Swiss bank, a spokesman for them said.
What really sparked the feud remains a mystery to those not in the inner circles of the family, but some warn about its implications for the group.
“The moment you start thinking of division, that this part you look after, that part I look after, it belongs to you, it belongs to me, it belongs to my other brother, then you cannot continue for too long,” Hinduja Group General Counsel Abhijit Mukhopadhyay said in a law firm podcast last year.
The Hindujas aren’t new to controversy. In the 1980s, they were investigated on allegations they took bribes to help Swedish gun-maker Bofors secure an Indian contract. The case was later thrown out of court. In the early 2000s, they were entangled in the UK’s “cash-for-passports” scandal, having donated money for the Millenium Dome when SP was applying for British citizenship. More recently, Prakash has been investigated for suspected tax evasion by Geneva prosecutors, an allegation he denies.
But the very public fight within the family may be the biggest existential threat the group has faced, and the feuding sides are digging in for battle.
“Many of the questions at the heart of the family dispute are now a matter for the courts,” said Karam. “I don’t think people realise how tight-knit our SP branch is. The six of us, we’re very tight-knit. One of us gets cut and everyone knows about it.”
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Most Viewed in Business
From our partners
Source: Read Full Article