MUMBAI: The Salgaocar brothers, one of Goa's biggest business groups, are locked in a battle over separation of the group's assets after one brother accused the other of reneging on a signed agreement.
Shivanand Salgaocar, son of Vasudev Salgaocar, who founded the mines-to-hotels group in the 1950s, has filed a petition in the Bombay High Court asking that a settlement agreed upon by the two brothers be implemented.
He has alleged that the family of Dattaraj Salgaocar had walked out of the agreement, claiming that the agreement was "tax evasive".
At stake are two family mansions in Goa, several offices, iron ore mines, a hotel business and ships worth hundreds of crores.
The case came up for hearing on Thursday. Justice SJ Kathawala said he will hear the petition filed by Shivanand against his brother Dattaraj on October 17. Mumbai-based law firm Dastur Dadhich & Kalambi is representing Shivanand while younger brother Dattaraj is being represented by two law firms - Gagrat & Company and Federal & Rashmikant
The Economic Times has reviewed the petition. ET tried to reach Shivanand who responded saying he's travelling abroad and asked us to get in touch with his office. Dattaraj Salgaocar in an email response to our queries said: "I have no comments to offer as the matter is sub judice."
The crux of the dispute is the memorandum of understanding by the two groups reached in October 2009. This proposal divided the family businesses and business assets and properties into the mining business and hotel business referred in the petition as 'business baskets'.
The MoU also provided for the segregation and division of the family businesses, the estate and the two family residential properties, and the steps needed to be taken to implement the division. The petition said that several resolutions were later passed by Salgaocar group companies to facilitate the settlement.
"Both the families were almost reaching a settlement but then we don't know what happened," said a person involved in the case, and declined to give more details citing it family's internal matter. "We are hoping to get it settled very soon."
Dattaraj is married to Dipti, the sister of Mukesh and Anil Ambani. Officials from both the Reliance groups appeared to have helped in the original agreement.
Shivanand's petition says that the division of assets was initially a smooth affair. "With professional advice of Atul Dayal, Gautam Doshi and tax and financial advisors KPMG, Dattaraj Salgaocar for himself and on behalf of his group consciously chose and elected to take the hotel business basket."
A written communication (letter of election) dated December 11, 2009, of the binding acceptance of the hotel basket and signed by Dattaraj Salgaocar was sent to the Shivanand faction.
The Shivanand group also agreed to infuse 385 crore into the hotel business and borrowed 100 crore from friends and associates to make the payment.
The VM Salgaocar Group was founded by late Vasudev Salgaocar in 1950s that made its wealth through its mining operations. They are mainly engaged in mining and iron ore export with interests in shipping, real estate, hospitality, agriculture, media and healthcare. The group's website says that it is one of the leading Indian suppliers of processed iron ore to the world's largest steel makers NSC and POSCO besides other steel mills in China, Romania, and the Middle East.
"Wealth management through generations has become difficult to manage in today's world," says Mita Dixit, co-founder and head of family business advisory at Equations Management. "In many cases, with generation next entering the family business after studying abroad they would like to do something very different from their family business, which becomes tipping point for separation."
The group also has several trusts that run schools, colleges, hospital and Goa's famous Salgaocar Football team.