A California court has ordered Zoho co-founder and chief scientist Sridhar Vembu to post a $1.7 billion bond in an ongoing divorce case with his former wife, Pramila Srinivasan, and paused certain asset transfers linked to the software company.
The order was issued by the Superior Court of Alameda County as part of divorce proceedings between Vembu and Srinivasan, who were married for nearly three decades. The court said the bond was necessary to protect community assets accumulated during the marriage and raised concerns over asset transfers that could disadvantage Srinivasan.
The court also appointed a receiver, Kyle Everett of San Francisco, to oversee several entities, including Zoho Corporation, Zoho Technologies, Zoho Distribution Corp., T&V Holdings, and the personal assets of Vembu and his associate Tony Thomas. The receiver has been authorised to take control of assets, records and property to prevent dissipation while the case is pending.
The order halted a multi-stage asset transfer that would have shifted the operations of the US-based Zoho Corporation to an entity fully owned by Thomas. The court rejected Vembu’s argument that the restructuring was undertaken for tax optimisation, stating that the explanation was not credible and that the move violated existing temporary restraining orders.
“The record in this case demonstrates that Petitioner has acted without regard for Respondent’s interests in community assets and without regard for the law,” the court said in its order.
Vembu initially did not offer a bond and later proposed amounts of up to $150 million, which the court rejected. Srinivasan posted a $275,000 bond to activate the receivership. Some related entities subsequently obtained stays by providing their own guarantees.
The dispute arises from Vembu’s divorce filing in California in 2021. The couple had lived in the state with their son before Vembu relocated to India in late 2019. Under California law, assets acquired during a marriage are generally treated as community property and are subject to equal division unless otherwise agreed in writing.
Srinivasan has alleged that Vembu transferred significant Zoho shareholdings to family members, including his sister Radha Vembu and his brother Sekar Vembu, leaving him with a claimed 5 percent stake in Zoho Corporation Pvt Ltd, the Chennai-based parent company. In court filings, she said she supported Vembu financially during Zoho’s early years, enabling him to leave his job to start the company.
“I felt shocked to learn only after he filed for divorce that he claimed to own just 5 percent of the company he had spent our marriage building,” Srinivasan said in court filings.
Vembu has denied the allegations and said his stake has remained at 5 percent since a 2010 restructuring in which Zoho Corporation Pvt Ltd acquired the intellectual property of the US entity for $50 million. Srinivasan has disputed that transaction, and the court noted gaps in financial disclosures, raising questions over transparency and potential fiduciary obligations.
