Though there is no hard stop, there is an understanding that by November end, the family will come to a settlement to break up one of the biggest conglomerates in the world.
‘Heads of Terms’ Framework
The group consists of 38 companies, of which half a dozen are listed, including flagship IndusInd Bank.
The November-end deadline is mentioned in the August 2022 judgement by Justice Hayden of the Court of Protection, and that the Hinduja family had agreed to a “heads of terms” framework with the intention to end all litigation pertaining to the empire.
Failing to arrive at a settlement could see the matter going back to the London court that has become the lead venue of a legal dispute. Multiple lawsuits have also been filed across the world, including in the Swiss canton of Lucerne.
The nub of the issue is the legal validity of the 2014 agreement signed by the four Hinduja brothers – SP, GP, Ashok and Prakash – that “everything belongs to everyone, and nothing belongs to anyone.” Additionally, it was also agreed then that each one of the brothers will be the executor of the other’s will.
While GP, Ashok and Prakash Hinduja had argued that this pact laid the foundation for succession planning for the 108-year-old conglomerate, the stance was challenged by SP’s two daughters – Shanu and Veenu – in 2019 and the matter became public in 2020.
Shanu’s son runs the privately held SP Hinduja Banque Privee SA as its chief executive. The daughters have argued that they have been sidelined and “financially squeezed” by their uncles from the family wealth.
One of the sources mentioned earlier said the Geneva-based bank is likely to remain with the SP Hinduja Group. However, it could not be independently verified if the family has agreed to hand over the lender to SP’s family members.
In 2013, SP acquired Banca Commerciale Lugano and merged it with an existing Hinduja entity – Hinduja Bank (Switzerland). The entity was subsequently rebranded as SP Hinduja Banque Privee SA. SP then became founding chairman of the bank.
SP’s brothers allege a “power grab” by Shanu and Veenu, claiming that they used the patriarch’s failing health to go against his wishes. The daughters have disputed this in court.
Shanu was originally made SP’s legal guardian, but in February 2021, the lasting power of attorney was taken away from them after it was made public that SP’s resources were used to fund the commercial dispute at the Chancery Court in London, instead of his treatment for dementia. The daughters disputed this, arguing SP’s family was deprived of income from 2014 until it dried up entirely by 2018. GP Hinduja Group denied any financial squeeze.
A spokesperson for the GP Hinduja family did not respond to ET’s questionnaire on the terms of settlement. A spokesperson of SP Hinduja family declined to comment. Kingsley Napley LLP and Whithers LLP are the solicitors in the case.
“It’s a temporary truce. The dispute over family assets is paused, not scrapped,” said an official in the know on condition of anonymity.
The private bank is smaller than several of the listed Hinduja companies but holds significance for its cross-holdings. Hinduja Bank Switzerland, for example, owns 4.98% of Ashok Leyland. At current market capitalisation of Rs 44,085.95 crore, the value of this holding is Rs 2,195 crore.
Mauritius-based IndusInd International Holdings (IIH) is a charitable organisation whose emeritus chairman was SP Hinduja. IIH owns 12.58% of IndusInd Bank, whose market capitalisation is Rs 89,075.47 crore as on Tuesday – which makes the stake’s value Rs 11,205.69 crore. IIH also has investments in Hinduja Leyland Finance and IndusInd Media & Communications Ltd. Ashok Hinduja is the current chairman of IIH, according to its website.
Shanu and Veenu Hinduja also own shares of the listed Hinduja Global Solutions, a tech solutions company, as part of the promoter group.
It is not clear yet how the cross-holdings will be settled. The two sides did not want to disclose details of the settlement or respond to ET’s queries.
A 2018 lawsuit in London had made public a dispute over $1 billion in assets held at the Swiss bank by a company tied to Ashok Leyland Ltd, as per Bloomberg.
The promoter holdings are through trusts and offshore entities, making it difficult to segregate ownerships. Even the brothers’ domiciles complicate matters. SP and Gopichand live in London, Prakash resides in Monaco and Ashok in Mumbai.
After last Friday’s judgement that made public the court proceedings, a spokesperson for Gopichand and his brothers Prakash and Ashok had said, “The Hinduja family matter regarding the health and welfare of SP (Srichand) has already been resolved amicably between all parties and today’s judgment solely concerned whether those matters should remain private.”
A statement from Shanu and Veenu read, “While we are pleased that the dispute surrounding the health and welfare of our father has been resolved, a final settlement with respect to the broader disputes still needs to be reached.”