Singhania's Rs 1,041-crore gift to son Gautam triggers war over assets
A gift of 37 per cent stake worth Rs 1,041 crore (Rs 10.41 billion) in textile and garment retailer Raymond Ltd by Vijaypat Singhania to his youngest son Gautam in February this year triggered a fight for Singhania’s assets by his Singapore-based grand children who want a division of his assets and have moved the Bombay high court.
In a communication dated February 9h, Vijaypat Singhania, 76, informed the company that he intends to transfer shares of certain promoter companies which holds shares in Raymond Ltd both directly and indirectly. The senior Singhania wants to transfer 24,290 shares in JK Investors (Bombay) Ltd and 9,996 equity shares of Smart Investments Private Ltd who collectively hold 37.17 per cent stake in Raymond.
The shares were proposed to be transferred by way of gift from Vijaypat to his son Gautam Hari Singhania, 48, so as to maintain continuity of management and align ownership interest, a communication by Raymond to the stock exchanges show. The Singhanias own 40 per cent stake in Raymond Ltd.
A Raymond spokesperson declined to comment on the suit filed by Singhania’s grandchildren. In 1998, Vijaypat Singhania and his elder son, Madhupati Singhania, 56, parted ways with Madhupati taking over the international businesses of the group.
Singhania retained India-centric businesses including flagship Raymond Ltd. Soon Gautam Singhania was running the day to day operations of the group as the chairman and MD and his father as chairman emeritus. In April last year, Navaz Singhania also joined the board of the company.
As per Bombay high court site, Singhania’s four grandchildren Ananya (29), Rasaalika (26), Tarini (20), and Raivat Hari (18), have sued their grandfather, Raymond Ltd, and made their own parents Madhupati and Anuradha a party to the suit, saying they had no legal authority to sign away their children’s ancestral rights. The court case is based on Hindu family law, which dictates inheritance issues, among others.
The grandchildren have challenged a 17-year-old family agreement that their parents signed in December 1998 with their grandfather, effectively giving up their own as well as their children’s rights to the Raymond empire, as well as various other assets, including real estate.
The grandchildren have claimed that they were informed of the agreement only when the youngest of the quartet turned 18.
Madhupati and his wife Anuradha were allegedly forced to gift valuable properties in the form of shares of Raymond Ltd and immovable properties then, which were grossly undervalued, a DNA newspaper report on Sunday said, adding that they were forced to give up all their shareholding in all the family businesses.
The siblings have also alleged that ancestral jewellery was grossly undervalued in the agreement, and have demanded a list of ancestral jewellery to ascertain their true value.
The Singhania siblings have also claimed that their grandfather was not the founder of the group but inherited it by virtue of being a Singhania, and that their parents and they, too, are entitled to similar inheritance of ancestral property. They have also asked the court to void the sale, transfer, or any other gift made during that time. The matter will be heard in the coming weeks.