Seem a joke to me. The best way to handle this is talk to the wife. Because he is complaning due to ego of wife.(My guess)
From India, Bangalore
Hello Jain,
Birthday celebration in your company, did derived from convention or policy? If convention, get a senior to talk to him while in earnest begin to look for a replacement for the 'Director' If it is derived from policy, how come at Director level, he did not know about it? Is your company HR up and running? Are you educating your employees obout policies wide enough? Are employees aware of the policies? If the answer is in the afirmative for most of these questions, then I see a classical case of either a recruitment error or a mischievous employee. Both ways, you need to stand your ground and begin to look for a replacement. Additonally, work some more on getting your employees to understand your policies better.

From Nigeria
Firmly tell him we can't do anything about the situation. Its his turn to leave or not to leave. Also let him know that you want him to reconsider his stance,though and you cant make any changes from your side.
Obviously you already doing the right thing of giving him time and chance. some times a closed door chat with subtle words might work but other wise that's it. All the best .

From India, Madras
Writing from across the border, I really don't know what the culture is in India vis a vis staffs' birthday celebration, in corporate settings. Back here, irrespective of the hierarchical status of an employee, such celebrations are the same - across the board.
You don't (meaning the boss in the present case) become the boss by trumpeting "I am the boss". You are the boss because of the specialized knowledge, skills, attitudes and leadership qualities that you possess, but in a team situation you are one of the team - and the team culture permeates everywhere, and also in celebration .
If he needs a glass cubicle for himself for such an occasion,he in unfit for his office
Arif ur Rehman

From Pakistan, Karachi

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