For the Hindujas, the biggest threat comes from within
The story of the rise of The Hindujas from being a distributor of a Hindi hit film to one of the most powerful and the richest families in the UK can easily be turned into a blockbuster of a movie itself.
The story of the rise of the Hindujas from being a distributor of a Hindi hit film to one of the most powerful and the richest families in the UK is good enough to be a blockbuster by itself.
The Hinduja brothers have always known to be part of a close-knit family with almost everyone invested into keeping the flock together. You will hardly find a picture which does not have all the four brothers, Srichand, Gopichand Prakash and Ashok, together in a single frame. However, events which are rapidly unfolding at the family of the Hindujas during the last few weeks gives an indication that at least one of the brothers may want to opt out of that frame.
The Hindujas Group, the wealthiest family in the UK with a fortune worth 22 billion pounds, and widely known for its involvement in the Bofors scandal in the 90’s, is now entangled in a bitter family feud that has deep ramifications for the group, which has interests in banking, automotive, and the health sectors across countries including India.
On June 23, a UK court ruled in favour of the Chairman of the Hinduja Group, Srichand Hinduja, and his daughter Vinoo giving them sole possession of the Swiss-based Hinduja Bank. This angered the other three brothers to such an extent that they are now planning to file a series of counter-suits to reclaim what they believe belongs to the entire family as per its stated philosophy of “everything belongs to everyone and nothing belongs to anyone.”
The basis of the feud is a letter on July 02, 2014, which all the four brothers signed an agreement saying that all assets of one brother belong to all, and each and every brother will appoint the others as their executors.
However, Srichand’s daughter, Vinoo recently went to the court stating that the letter has no legal sanctity and cannot be used as a will or power of attorney, and hence wanted the letter to be declared invalid. Justice Falk of the High Court of Justice, Business and Property Court of England and Wales ruled that the three other brothers tried to use the letter to take control of Hinduja Bank which was in Srichand’s sole name.
The court said that Srichand had insisted in 2015 that the letter “doesn’t reflect his wishes and that the family’s assets should be separated”. Hence, the court held the July 2 letter as invalid thereby giving full possession of the family’s Swiss bank to Srichand. But the other three brothers said Srichand was suffering from a form of dementia and hence he is not in control of his faculties and tends to take wrong decisions.
The group founded by Parmanand Hinduja, a Sindhi businessman, in 1914 initially began trading in commodities and textiles and later its operations expanded to Iran but had to shift its offices to Europe following the Islamic Revolution which broke out in that country during the late seventies. His son, Srichand Hinduja, along with his brother, Gopichand, then moved to London in 1979 to manage their export operations.
Since then, the group started acquiring some big ticket companies such as Ashok Leyland from British Leyland and Gulf Oil from Chevron and added a bank in Switzerland to their portfolio. Once the family’s business started expanding rapidly, Srichand donned the role of the group chairman while his younger brother, Gopichand, became its vice-chairman. Prakash moved to Geneva to run the operations of the bank while Ashok handles the Indian operations.
The Hindujas have a large footprint in India. They floated IndusInd Bank and are planning to increase their stake in the bank whenever the RBI allows them to do so. Ashok Leyland which makes buses and trucks and is based out of Chennai is another major company that they have a majority stake in. The other major companies which the Hindujas own are Hinduja Healthcare Ltd which runs a few hospitals in India, Ashok Leyland Defence and Hinduja Global Solutions, which runs a BPO and a training institute.
Even as the business expanded, controversies regarding the role of the family in certain deals began to surface. Among the first and the biggest was its alleged involvement in the Bofors scandal in the late eighties and the nineties.
The family was learnt to have been involved in the purchase of the Bofors gun but the investigating agencies including the CBI could never prove the charge against the brothers, in spite of the fact that the Delhi High Court exonerated them even though as late as 2018 the CBI sought permission from the court to reopen the case involving the Hinduja brothers.
The scandal related to illegal kickbacks allegedly paid to the Congress Party and some members of the Gandhi family for the purchase of $1.4 billion deal between the Swedish arms manufacturer, Bofors with the Government of India for the sale of 410 field howitzer guns and a supply contract twice that amount. The charges against the Gandhi family were never proved while the effectiveness of the howitzer guns can be seen from the fact that they are considered among the best that the Indian defence forces had bought.
But what made the Hindujas such a powerful family over the years and how did they amass such a huge wealth? Srichand Hinduja in an interview with The Independent had let out the secret of his family staying together.
“We focus always on our family. There are our brothers and four sons in the business” explains SP. “We try to see who has which expertise in each sector and try and develop every individual for that so he can bring the maximum economic strength.”
He went on to add that in the professional world, there is always a lot of politics. We say: `Let’s follow this philosophy which will give all of us the maximum growth and be better for our health because we will not waste our time becoming upset,” Srichand Hinduja had told Hillary Clarke in an interview for The Independent over 10 years ago.
Srichand Hinduja further pointed out to her that the internecine power struggles are also avoided by strict adherence to a rigid patriarchal structure and their Vedic religion, which also forbids them from doing business in meat, alcohol, or tobacco.
The patriarch of the family is also known to carry his own food whenever he gets invited to one of the dinners at the Buckingham Palace, an allowance rarely accorded to the other guests.
When the company was based out of Iran, the Hindujas made it a point to actively cultivate the rich and the powerful including the Shah of Iran who, as the tale goes, was so impressed with the brothers, that he is learnt to have parked part of his wealth with them after the brothers shifted their base to the UK.
In the UK, controversies continued to follow them. When the two brothers, Srichand and Gopichand pitched their tent in London, their first stop was at the offices of the longest-serving Asian MP, Keith Vaz who was later accused of trying to use his influence with the government to get a citizenship for the Hindujas. It was followed by allegations of corruption involving Ashok Leyland which supplied 100 army vehicles to the Sudanese Defence Ministry.
Meanwhile, their friendship with the powerful continued to grow and among them were the then prime minister of the UK, Margaret Thatcher, Tony Blair and the former US president George W Bush.
Fortunately for the Hindujas, none of the allegations has stuck while their businesses have continued to grow. But even the Hindujas would have never expected that their biggest threat to their group will come from within. For the three younger brothers though, it is more of a matter of survival and if the higher courts continue to rule in favour of Srichand, they will be left with almost nothing to show for all their struggles to build a multi-billion pound business empire.