A high-profile divorce settlement between a flamboyant Indian textile tycoon, Gautam Singhania, and his wife, Nawaz Modi, could lead to him forfeiting 75% of his $1.4bn (£1.1bn) fortune. Both Singhania and Ms Modi are board members and promoter shareholders of the publicly listed Raymond Group, one of India's best-known consumer brands. The estranged fitness coach wife of the industrialist — who is known for his penchant for yachts, fast cars and private jets — is unwilling to settle for lower, a source close to Ms Modi has told the BBC, rebuffing news reports that the couple had initiated more "realistic" settlement talks. Two family members from either side are mediating the dispute and the 75% figure is still very much on the table, sources have told the BBC. "She says he has agreed to 75% in front of numerous people — friends, mediators, lawyers and chartered accountants. There's no going back on it," one source said, adding that Ms Modi was insistent that an irrevocable trust should be formed where the wealth was transferred and secured for her two daughters' future. "Close to 96% of the net worth of the promoters of India's wealthiest families is parked in trusts," said Rishabh Shroff, partner at Cyril Amarchand Mangaldas, a Mumbai law firm. "These structures are increasingly attractive to wealthy business families, to shield their assets and insulate their businesses from insolvency, family or creditor disputes." While Singhania is reportedly keen on creating a trust where he is the sole trustee and settler, Ms Modi has opposed this proposal. "Speaking as a neutral third party, I don't think she should agree to a trust structure where she has no voice or say on how it is run or governed. She will want to be a co-trustee with certain rights, along with being a beneficiary," Shroff said. "Most companies don't survive beyond three generations. Raymond is a fifth-generation business and Nawaz is keen that her daughters have a future in it," a source close to Ms Modi told the BBC. Ms Modi is also said to be keen to remain a member of the board, and has no objections to her husband managing the business after their divorce. She has received public support from her father-in-law, veteran businessman Vijaypat Singhania, who has in the past accused his son of driving him out of his own house in 2017, leaving him with little money to survive on — allegations Singhania has previously denied. The acrimonious feud between the couple first came to light when a video of Ms Modi being denied entry into a company Diwali party went viral in November. She's since made disturbing allegations of physical assault on her and their minor daughter by the scion of the almost hundred-year-old Raymond Group. Singhania didn't agree to speak with the BBC about the allegations. In response to a request for an interview, his spokesperson directed the BBC to his statement which said, "I have chosen not to comment on the reports in media about matters pertaining to my personal life as maintaining the dignity of my family is paramount to me." Ms Modi had told Sangeeta Waddhwani, a celebrity journalist and former executive editor of Hello! India magazine, that she'd suffered "grievous injury" including what she claimed was a broken sacrum bone at the hands of her husband, and had had to get help from the family of Mukesh Ambani — Asia's richest man — to get the police on the scene. Three non-cognisable offences — where a warrant is needed for arrest and the court's permission is required for an investigation — have been filed against Singhania at two different police stations in Mumbai. Ms Modi "continues to be restrained from resuming work" because of her physical condition, Ms Waddhwani told the BBC. Singhania has told employees and shareholders in an internal email — which the BBC has seen — that "it is business as usual" at Raymond even in these difficult times. The company's shares have begun to rebound after coming under heavy selling pressure when the dispute first became public. But the saga has thrown up uncomfortable questions about domestic abuse allegations at the highest echelons of Indian society, and potential lapses in corporate governance at the country's biggest family-run conglomerates. In a filing to the exchanges earlier this month, Raymond's independent directors said they were committed to protecting the interest of minority shareholders. They added that disputes between the two promoter directors did not affect the capacity of the chairman and managing director (MD), Gautam Singhania, to manage the affairs of the company. They also said investigations into matrimonial disputes lay "beyond the remit" of the independent directors. But several questions raised by corporate governance and proxy advisory firms such as Institutional Investor Advisory Services (IIAS) in an open letter to Raymond's board remain unanswered. These include the possibility of criminal liability on the company in the light of these events or the ability of Singhania to discharge his role as chairman and MD amid the personal distractions. Concerns have also been raised about whether there are adequate controls in place to ensure that company funds — which Ms Modi has alleged were being used by her husband for personal benefit — are being protected. Raymond has not responded to the BBC's question about this charge. "She has acted as a whistle-blower, so Raymond's audit committee will be mandated to address the issue. They can't hide behind the fact that it is a marital dispute," Hetal Dalal, president of IIAS, told the BBC, saying she was "disappointed" with the company's response. The board has appointed a senior independent legal counsel, Berjis Desai, for advice, but sources have told the BBC that Ms Modi isn't happy with the appointment. While the company's share price decline has been arrested for now — it was down 20% at one point — there are questions about how much of this is because of the exuberance in the broader market vis-a-vis a recovery due to the board's letter. A dispute between promoters is expected to remain a continuing overhang on the business. A split could lead to a number of scenarios playing out that could impact shareholders, experts say, including a change in voting patterns or even ownership. A senior corporate lawyer told the BBC that the matter is unlikely to be resolved soon, given that most of Singhania's net worth lies in his 49% stake in Raymond. This person said it would be difficult for the businessman to preserve his shareholding while also making a large monetary settlement without having to borrow or monetise assets. They should ring-fence the business by immediately "separating themselves" from Singhania, Ms Dalal said, adding that retaining a chairman accused of domestic abuse also raised broader questions about corporate culture within the organisation, which the board needed to address. "Violence against women is not an aberration per se in some of the richest families in India," Shobhaa De, a prominent writer and social commentator, told the BBC. "This is corporate India's best-kept secret." Ms De says she is cynical about how the affair will conclude, given the advantages powerful people have. "It is easy to silence scrutiny in this country," she said. Promoters — who typically hold a controlling block of shares in many listed entities in India — are known to exert significant influence in the appointment of board members. This has led many to question how truly independent they are, and their ability to express dissent or fulfil governance obligations. Ms De thinks it will be a difficult, exhausting fight. "It remains to be seen how strong Nawaz's negotiating powers are," she says, adding that she thinks "the story of the complete man will remain complete" — a reference to the catchy brand tagline that's defined Raymond since the 1980s. — BBC
