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Hinduja family feud puts 107-year empire in trouble

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SP wants the London court to rule that the letter has no legal effect. A decision on this is not yet due, but if he succeeds, the assets in his name could pass to his daughters Vinoo and Shanu upon his death. Meanwhile, a court in the Swiss canton of Lucerne has ruled that the case between SP and his brothers is on hold, pending a decision on who will represent his interests.

Although the Swiss bank represents only a tiny fraction of the family’s overall assets, the case raises broader ownership questions. The three brothers see this as a takeover by the daughters of SP, who they say are using their father’s weakened state to go against his long-held wishes.

The mansion owned by the Hinduja brothers on Carlton House Terrace in London, just down the road from Buckingham Palace.

The mansion owned by the Hinduja brothers on Carlton House Terrace in London, just down the road from Buckingham Palace.Credit:Bloomberg

SP had a mantra that no one owns anything, everyone owns everything, said Radhamohun Gujadhur, an adviser to the brothers, in an interview. Anyone who does differently speaks under their own illusions or to promote a selfish private agenda. The group structure has withstood the challenges of Shanu and Vinoo Hinduja who are at odds with their own father’s vision for the group.

Shanu declined to comment on the dispute while Vinoo declined requests for comment. Ashok said he could not comment on the matter. Charles Stewart-Smith, a spokesperson for the brothers, declined interview requests, referring to an earlier statement from them saying the efforts go against the values ​​of our founders and our family.

Another London lawsuit from 2018 shows how the feud could affect other family assets. The fight involved more than $ 1 billion in assets held at the Swiss bank by a company linked to Ashok Leyland, one of the group’s foremost listed companies and the world’s third-largest bus maker.

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Opaque holding structures through trusts and offshore entities make it difficult to determine ownership of conglomerate companies. For example, the brothers’ shares in IndusInd Bank in Mumbai, among the largest private banks in India, are held in an entity registered in Mauritius. Even the homes of the brothers complicate matters. SP and Gopichand live in London, Prakash resides in Monaco and Ashok in Mumbai.

The organization of the group that worked for the brethren may not be that of the third and fourth generation Hindus who now take the reins.

Those old New World structures they find themselves in are going to fall apart, said Nigel Nicholson, a professor at the London Business School and author of Family Wars. The idea that one can maintain unity with fuzzy notions of common property without clear governance structures is tricky.

For example, SP’s grandson Karam, 31, who was appointed CEO of Swiss banks last year, has a different view of owning his business.

SP is the founder and always has been and continues to be the sole shareholder of this institution, he said. In the absence of a global agreement, the members of our family hold individual participations.

Ashok Hinduja wants the group to stick to their age-old motto that everything belongs to everyone and nothing belongs to anyone.

Ashok Hinduja wants the group to stick to their age-old motto that everything belongs to everyone and nothing belongs to anyone.Credit:Peter Morris

The adviser to the brothers disagrees.

The Hinduja group has no individual ownership and that includes the bank, Gujadhur said.

Karam renamed the bank SP Hinduja Banque Privée, although on the Hinduja group website it is still called Hinduja Bank Switzerland. Installed in a modest building at the foot of the old town of Geneva, the bank’s headquarters have a simple blue door and a small brass plaque engraved with its new name. In the interview, Karam said he could understand the timing for the bank’s rebranding might seem provocative given the ongoing legal battle. But the board approves the move and it reflects the legal status quo, he said.

The bank is small by Swiss private banking standards, with around 2.43 billion Swiss francs ($ 3.6 billion) in client assets. Nonetheless, he has become a lightning rod for the dispute, with Karam hinting that the fight has tints of misogyny since the MS branch is dominated by women.

It’s shocking ; I just can’t understand the animosity that exists towards the MS branch of the family, said the Columbia University graduate. It makes you wonder how even such wealthy and somewhat westernized and powerful individuals, what their views really are, perhaps, towards women. I do not know. That’s all I can think of.

Karam’s mother Shanu, who is the president of Swiss banks, said her rise in the company was instructive, showing her father’s opposition to sidelining women.

Traditional Indian family businesses often sideline girls from key roles, but for the brothers’ advisor, Karam’s accusations of misogyny are downright false. Vinoo and Shanu are on the boards of several companies in the group, and if there was any truth to these allegations of misogyny, I don’t think they would have been appointed to these boards, he said. . The sisters were removed from their posts last year from all their directorships in the companies of the group, with the exception of the Swiss bank, said a spokesperson for the companies.

What really sparked the feud remains a mystery to those outside of the inner circle of the family, but some warn of its implications for the group.

The moment you start to think about the division, that this part that you take care of, that part that I take care of, it belongs to you, it belongs to me, it belongs to my other brother, then you can’t go on too much Long, Hinduja Group General Counsel said Abhijit Mukhopadhyay in a law firm podcast last year.

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The Hinduja are not new to the controversy. In the 1980s, they were investigated into allegations that they had accepted bribes to help Swedish arms manufacturer Bofors secure an Indian contract. The case was then dismissed by the court. In the early 2000s, they were embroiled in the UK passport money scandal, having donated to the Millennium Dome when SP applied for UK citizenship. More recently, Prakash was investigated for alleged tax evasion by Geneva prosecutors, an allegation he denies.

But the very public fighting within the family may be the greatest existential threat the group has faced, and the warring parties are bracing for battle.

Many of the issues at the heart of the family conflict are now in the hands of the courts, Karam said. I don’t think people realize how tightly knit our SP branch is. The six of us were very tight-knit. One of us gets cut and everyone knows.

Bloomberg

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