Indian billionaire Gautam Singhania’s wealth is in jeopardy as wife demands divorce over domestic violence

Indian billionaire Gautam Singhania's wealth is in jeopardy as wife demands divorce over domestic violence

India’s billionaire businessman Gautam Singhania will lose his wealth as soon as he divorces his wife.

Textile industry icon Gautam Singhania will lose 75% of his wealth after divorcing his wife Nawaz Modi on strict terms.

This is because both Gautam Singhania and Nawaz Modi are board members of their ‘publicly listed’ company Raymond Group. This company is a well-known brand of India.

Gautam Singhania’s wife is a fitness coach who is known for traveling in his luxury yachts, sports cars and private jets. They are no longer willing to settle for lower terms for divorce. Sources close to Nawaz Modi have told the BBC that she denies media reports that she is ready to settle for a deal.

Two members from both the families are playing the role of mediator. Sources told the BBC that 75 percent of the wealth is being discussed.

A source told the BBC that Nawaz Modi says that Gautam has declared 75% of his wealth in front of several people, friends, mediators, lawyers and chartered accountants. And now there is no question of going back.

The source added that Nawaz Modi is insisting that the wealth be transferred to a trust that cannot be dissolved later to safeguard the future of his two daughters.

Rishabh Sheroff, a partner at Mumbai-based law firm Cyril Amarchand Mangaldas, says that 96 percent of the wealth of India’s richest families is held in trusts.

“This method is becoming increasingly popular among wealthy business families to protect their business from bankruptcy, family and creditor disputes,” he says.

Gautam Singhania wants a trust to be created with him as the sole trustee and manager but Nawaz Modi has opposed it.

“As a neutral third party, I don’t think Nawaz Modi will accept a trust where his opinion or voice has no meaning in how it is run,” says Rishabh Sheroff. She would like them to be co-trustees and have certain rights and benefits as well.’

A source close to Nawaz Modi told the BBC that ‘most companies don’t survive past the third generation. Raymond is being run by the fifth generation and Nawaz wants his daughters to have a future in it.

Nawaz Modi also wants her to remain a member of the board and has no objection to her husband taking over the business even after the divorce.

Gautam Singhania’s father and renowned businessman Vijaypat Singhania has publicly supported Nawaz Modi.

Vijaypat Singhania had in the past accused his son of kicking him out of his own home in 2017 and forcing him to live on meager income. Gautam Singhania had denied these allegations.

Distance in relationships

The couple’s strained relationship came to the fore in November when a video of Nawaz Modi being denied entry to a company’s Diwali function went viral.

After this incident, she accused the owner of the 100-year-old Raymond Group of torturing her and her little girl.

India's billionaire businessman Gautam Singhania will lose his wealth as soon as he divorces his wife.

Gautam Singhania has refused to give an interview to the BBC, while his spokesperson gave his statement to the BBC, in which he said, “I have responded to reports in the media about matters related to my personal life. Have decided not to comment because maintaining the dignity of my family is most important to me.’

In an interview to celebrity journalist Sangeeta Vidhwani, Nawaz Modi said that she had suffered ‘severe pain and injuries’ at the hands of her husband and claimed that he had also damaged the lower part of her spine. She says she had to get help from the family of Mukesh Ambani, Asia’s richest man, to call the police.

Three complaints have been filed against Gautam Singhania in two different police stations in Mumbai, which require an arrest warrant and a judge’s permission for investigation.

Sangeeta Vidhwani told BBC that due to injuries, Nawaz Modi is not able to do his work.

In an email to the company’s partners and employees, Gautam Singhania said that even during these difficult times, it is business as usual at Raymond.

When the controversy first came to light, the company’s shares were under intense pressure to sell off, but their value has now started to rebound. But the story has raised serious questions about allegations of domestic violence in the upper echelons of Indian society and possible lapses in corporate governance among the country’s biggest business families.

Effects of personal conflict on business

After all these controversies came to light earlier this month, the independent director of Raymond Company had stated that he is committed to protect the interests of minority shareholders.

He added that the conflicts between the directors did not affect the ability of Chairman and Managing Director (MD) Gautam Singhania to manage the affairs of the company.

He also said that investigations into matrimonial disputes were “beyond the purview” of independent directors.

India's billionaire businessman Gautam Singhania will lose his wealth as soon as he divorces his wife.

But questions raised by corporate governance and proxy advisory firms such as the Institutional Investor Advisory Service in a letter to Raymond’s board went unanswered.

It asks about the possible liability on the company in light of these events and asks whether Gautam Singhania can properly discharge his duties as MD and Chairman in the current controversy.

Concerns have also been raised about whether adequate measures are in place to ensure that company funds are protected.

Nawaz Modi has alleged that her husband is using company funds for personal gain. Raymond has not responded to the BBC over the allegations.

Hetal Dalal, president of Institutional Investor Advisory Services, says she is disappointed with the company’s response. She says that Nawaz Modi played the role of a ‘whistleblower’ and Raymond’s audit committee will be mandated to sort out the issue, they cannot pretend that it is just a marital dispute.

The Board has appointed Burgess Desai as an impartial senior legal advisor for consultation. A source told BBC that Nawaz Modi is not happy with this appointment.

The company’s share price has stopped falling, but at one point it was down 20 percent. It is being questioned whether this was due to the high level of market activity or whether it was due to the recovery board’s letter.

The conflict between Gautam Singhania and his wife is expected to hang over business. Business divisions can lead to several scenarios that can affect shareholders, experts say.

A senior corporate lawyer told the BBC that the matter was not going to be resolved soon and that 49 per cent of Gautam Singhania’s wealth was in remand.

He says that it is difficult for an entrepreneur to maintain the number of shares in the business without selling anything or taking money from someone, and on the other hand, settle a huge deal.

Hetal Dalal says the company should immediately limit business by ‘disassociating itself’ from Gautam Singhania.

He added that retaining a chairman accused of domestic abuse also raised broader questions about the corporate culture within the organization, which the board needed to address.

“The Secret of Rich Families”

A well-known writer, Shobha Di, told the BBC that ‘violence against women is not given much importance in India’s richest families. And this is a secret of India’s business families.

They say they have concerns about how the matter is being handled because powerful people have too many privileges and they have silenced the process of accountability in this country.

The promoter directors of a company are those who generally look after the management of shares of companies in India and are said to influence the appointment of board members. This has raised many questions regarding his influence over the company and independent policy.

Shobha Di says it will not be an easy fight and it will go on for a long time.

She says that what will matter in this battle is how much force Nawaz Modi uses to get his terms. And he quipped, quoting Raymond’s tagline, ‘A perfect man’s story will remain perfect.’

Leave a Reply

Discover more from Jobzn

Subscribe now to keep reading and get access to the full archive.

Continue reading