New Delhi: The increasingly bitter feud in the Hinduja Group 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, Bloomberg reported.
S P Hinduja (85) now suffers from a form of dementia, and his grandson Karam Hinduja, his sister, mother, aunt and grandmother are locked in a battle with the rest of the Hinduja family over pieces of the $18 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, the report said.
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 report added.
“They seem to have reached a point of no return,” said Kavil Ramachandran, a family-business expert at the Indian School of Business, adding, “It’s most unlikely to go back to the socialistic philosophy of everything for everybody.”
The report said that with a collective net worth of about $15 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 the assets held by one belong to all.
That came as SP – represented by his daughter Vinoo – claimed sole ownership of the 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 upon 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, the report added.
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.
“SP had one mantra that nobody owns anything, everybody owns everything,” Radhamohun Gujadhur, an advisor 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,” he added.
Another London lawsuit from 2018 shows how the feud could touch other family assets. That fight was over $1 billion in assets held at the Swiss bank by a company tied to Ashok Leyland Ltd, one of the group’s most high-profile listed companies and the world’s third-largest manufacturer of buses, the report added.
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 Ltd 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, while Ashok stays in Mumbai.
The group’s organisation that worked for the brothers may not for third and fourth generation Hindujas now taking the reins, the report said.
For instance, SP’s 31-year-old grandson Karam, appointed as 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. In the absence of an overarching agreement, members of our family have individual shareholdings,” he said.
Karam has renamed the bank SP Hinduja Banque Privee, although on the Hinduja Group website it is still called Hinduja Bank Switzerland.
The bank is small by Swiss private banking standards, with about 1.7 billion Swiss francs ($1.8 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, the report said.
“It’s shocking; I simply cannot understand the animosity that exists toward the SP branch of the family,” the Columbia University graduate said, adding, “It makes you wonder how even such wealthy and somewhat westernised and powerful individuals, what their views truly are, maybe, towards 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”.
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