Sona Comstar battle: Priya Kapur moves to oust Rani Kapur from trust

Priya Sachdev Kapur has moved to exclude her estranged mother-in-law Rani Kapur from a trust set up by the late Sunjay Kapur, which controls the promoter entity of listed Sona BLW Precision Forgings Ltd, escalating the fight for ownership of the auto parts firm valued at over $3 billion.

In a notice sent to Rani Kapur on March 24, Priya Kapur said that her mother-in-law’s actions were against the interests of RK Family Trust and therefore she was removed from the trust.

This comes after Rani Kapur issued a notice to remove Priya from the board of trustees on March 21, nearly two months after she filed a civil suit in the Delhi High Court asking the court to invalidate the trust.

“Trust law does not allow a trustee to exercise powers under a trust while simultaneously challenging the existence of a trust,” said a press release issued on behalf of Priya Kapur.

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Emailed questions to Rani Kapur’s lawyer were not immediately responded to.

The developments mark the latest escalation in a dispute between Priya Kapur and her estranged mother-in-law Rani Kapur over ownership of the trust that controls promoter entity Sona BLW Precision Forgings Ltd.

RK Family Trust holds 65% stake in Aureus Investment Private Ltd and 28% stake in Sona Comstar. Aureus is represented on the company’s board of directors by Priya Kapur as a non-executive director.

“The removed trustee can apply for stay. A lot depends on the terms and enforceability of the trust deed,” said Akshat Pande, managing partner of Alpha Partners. he said.

The family trust has four beneficial owners: Priya, her son Azarias and Sunjay’s two children with Karisma Kapoor, Samaira and Kiaan. Rani Kapur was one of the trustees of the family foundation.

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Before Sunjay died in London in June last year, he was the sole beneficial owner of the foundation bearing Rani Kapur’s name. After the death of her husband, Rani Kapur transferred all of her shares in Aureus to this foundation in 2017, and in 2019, her son Sunjay Kapur became the sole real owner of the foundation.

After his death, his usufruct rights were transferred to the four trustees mentioned above. In a petition filed in the Delhi High Court, Rani Kapur challenged Priya Kapur’s control over the promoter organization, alleging that her shares were fraudulently transferred to the trust in 2017.

“By challenging the validity of the Trust and seeking to deprive the Trust of all its assets, you have completely disregarded the Trust and created an interest in the Trust assets that is completely inconsistent with the interests of the beneficiaries and the Trust Deed, thus rendering you incapable of continuing to serve as Trustee of the Trust,” Priya’s notice to Rani Kapur said.

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The dispute between Rani Kapur and Priya Sachdev Kapur began in July, when Rani Kapur wrote to the company’s board of directors a day before Sona BLW Precision Forgings’ annual general meeting, where shareholders were to vote on Priya’s position on the board.

In the letter, Rani Kapur opposed Priya’s appointment to the board of directors of Sona Comstar and asked the company to postpone the case. He claimed that he was forced to sign some documents and that he was not aware of all the details of the proceedings.