Ness Wadia, the eldest son of billionaire Nusli Wadia, courted controversy once again as The Financial Times reported on Tuesday that a Japanese court had sentenced him to a suspended two-year jail term for illegal drug possession while on a skiing holiday.
Though the 47-year-old scion of the $7.5 billion Wadia Group will not have to serve any jail time for now and is believed to be back in India, the overhang of the episode may linger for a while on group companies.
On Tuesday, shares of several Wadia group companies plunged as investors fretted about Ness Wadia’s ability to lead the group and succeed his ageing father. Ness is the first in line to head the Wadia conglomerate, which has interests in textile, aviation, real estate and food, among other businesses.
“There is a regulatory risk, which will possibly make investors cautious since it is a suspended sentence for five years, though it is unlikely that he will actually serve it ever," said a senior analyst at a Mumbai-headquartered brokerage. “This also raises questions on his ability to lead the group at some point and effectiveness as a director on the group companies, many of which are listed entities with significant investor wealth riding (on them)."
Shares of bed linen maker Bombay Dyeing and Manufacturing Co. Ltd slumped 9.78% on BSE, the most since 31 May 2018, while Bombay Burmah Trading Corp. Ltd, which owns tea and cocoa plantations, fell 2.4%. National Peroxide Ltd declined by 5.83% and Britannia Industries Ltd by 2.5%. Wadia is a director of all these companies and the chairman of Bombay Burmah Trading.
According to the FT report, Wadia admitted to drug possession, saying the substance was for his personal use. Wadia spent a period in detention before his indictment on 20 March and an undisclosed period of detention before a court hearing. The Sapporo District Court handed him a two-year prison term, which was suspended for five years.
The Wadia Group said the suspended sentence and the judgement would not impact Ness Wadia in discharging any of his responsibilities. “Ness Wadia will continue to play the role that he has done hitherto, both within the Group and outside," it said in a statement.
This was not Wadia’s first brush with the law. In 2014, actor Preity Zinta lodged a police complaint against him, alleging criminal intimidation.