India Tycoon’s Divorce Settlement Threatens Fortune

Gautam Singhania, a renowned Indian textile tycoon, faces the risk of losing 75% of his $1.4 billion fortune due to a high-profile divorce settlement with his wife, Nawaz Modi. Both Singhania and Modi are board members and promoter shareholders of the publicly listed Raymond Group, a well-known consumer brand in India. The divorce settlement talks have reportedly been anything but smooth, with Modi rejecting news reports of more “realistic” settlement discussions and insisting on the 75% figure. She also wants an irrevocable trust to be formed to secure her daughters’ future. However, the couple disagrees on the terms of the trust, with Singhania preferring to be the sole trustee while Modi insists on being a co-trustee with certain rights. The dispute has shed light on the use of trusts by wealthy families in India to protect their assets and businesses from disputes and insolvency. While Singhania wants to create a trust to protect his wealth, Modi wants to ensure her daughters have a future in the family business, highlighting the long-term implications of this divorce settlement. The acrimonious divorce has also raised questions about domestic abuse allegations at the highest levels of Indian society and potential lapses in corporate governance at family-run conglomerates. These concerns have prompted discussions about criminal liability for the company and the ability of Singhania to effectively discharge his role as chairman and managing director amidst personal distractions. Proxy advisory firms have also raised concerns about the protection of company funds and the need for the audit committee to address this issue. Additionally, there are concerns about the market impact of the dispute, including changes in voting patterns and ownership. The unresolved nature of the matter suggests a prolonged battle that may require Singhania to borrow or monetize assets to make a monetary settlement while preserving his shareholding. Experts also suggest the need for the company to separate itself from the chairman accused of domestic abuse and address broader issues of corporate culture. This high-profile divorce case highlights the prevalence of violence against women in wealthy Indian families and raises questions about the independence and governance obligations of board members in family-run businesses. The outcome of the settlement negotiations and their impact on Singhania’s fortune and the Raymond Group will be closely watched by the financial and corporate sectors in India.