California | A California court has directed Zoho Corporation co-founder and chief scientist Sridhar Vembu to post a bond of approximately ₹14,100 crore in an ongoing divorce case, citing serious concerns over financial transparency and the potential dissipation of marital assets. The order, passed in January 2025 by the Superior Court of California, County of Alameda, also led to the appointment of a court-appointed receiver over several Zoho-linked US entities and Vembu’s personal assets—an intervention the court itself described as extraordinary.
The proceedings stem from a long-running divorce dispute between Sridhar Vembu and his estranged wife Pramila Srinivasan, an entrepreneur and founder-CEO of health-tech firm MedicalMine. Under California law, assets acquired during marriage are treated as community property and are subject to equal division unless otherwise agreed through a written arrangement.
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Court raises concerns over financial disclosure
In a strongly worded order, the court observed that the record suggested Vembu had acted “without regard for the law” and failed to adequately protect the respondent’s interests in community assets. The judge noted a lack of cooperation in financial discovery and insufficient disclosure of transactions that could materially affect the value and availability of marital property.
The court warned that without strict safeguards, there was a real risk that assets could be moved beyond its jurisdiction, undermining its ability to ensure an equitable division.
Disputed restructuring of Zoho’s US operations
Judicial intervention followed an ex-parte application filed by Pramila Srinivasan in November 2024, seeking to restrain a proposed corporate restructuring involving Zoho Corporation (US), the American arm of Chennai-based Zoho Corporation Private Limited (ZCPL).
According to court filings, the restructuring was designed in three stages. In the first phase, Zoho Corporation transferred its assets to a newly created entity, Zoho Distribution Corp, headed by Tony Thomas, a long-time associate of Vembu. In the second phase, the shares of Zoho Distribution Corp were sold to ZUS Holdings, an entity wholly owned by Thomas. A third phase—covering the transfer of data centres and other critical assets—was subsequently halted by the court.
At a hearing on December 12, 2024, the judge remarked that the transaction appeared akin to “handing your money to a friend to hold.” While the court did not make a definitive finding of misconduct at that stage, it emphasised that its primary obligation was to safeguard community assets.
Violation of automatic restraining orders
During a subsequent hearing on January 15, 2025, the court rejected explanations offered for the restructuring, including claims that it was undertaken for tax planning purposes, describing them as “not credible.” The judge further held that the transactions violated California’s Automatic Temporary Restraining Orders (ATROS), which come into force automatically once a divorce petition is filed and prohibit either spouse from transferring or disposing of community property.
Taken together, the court concluded, the pattern of asset movements justified the imposition of a substantial bond to secure the marital estate.
Assets shifted outside the United States
The court also noted that Vembu had relocated to India in 2019 and that over the past decade, a significant portion of marital assets had been moved out of the United States. It observed that Zoho Corporation now appeared to be the “only substantial revenue-generating asset remaining in the US.”
Such transfers, the court said, could severely impair the enforceability of any future judgment in favour of the respondent.
Conflicting claims over shareholding
Vembu has maintained that he holds only a 5% stake in ZCPL. However, documents referenced during court proceedings and data from corporate intelligence platform Tofler present a more complex ownership picture. According to these records, Radha Vembu, Sridhar Vembu’s sister, holds 47.8% of ZCPL, while brother Sekar Vembu owns 35.2%, and Tony Thomas holds 8%.
The court described the lack of clarity surrounding ownership and beneficial interest as “deeply troubling,” noting that it raised reasonable questions about whether full disclosure had been made.
Receiver appointed, bond remains unpaid
To secure disputed assets, the court appointed Kyle Everett, a San Francisco-based professional, as receiver with authority over Zoho Corporation, Zoho Technologies, Zoho Distribution Corp, T&V Holdings, and certain personal assets of Sridhar Vembu and Tony Thomas.
While several entities later posted bonds to obtain relief from receivership, Sridhar Vembu has not deposited the ₹14,100 crore bond ordered by the court. Over multiple hearings, he proposed alternative amounts ranging from approximately ₹5 crore to ₹1,250 crore, all of which were rejected as insufficient.
No official response from Zoho
Detailed queries sent to Sridhar Vembu and Zoho’s public relations team did not elicit a formal response. The divorce proceedings remain ongoing, with the court indicating that further findings could have significant implications for the division of marital assets and the ownership structure of Zoho’s global operations.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
