Conventional wisdom would have us believe that sibling rivalries leading to bitter partings have always been ruinous for Indian business families. Indeed, a lot of business family dynamics involves putting in place measures to prevent such break ups.
It might be worth reconsidering the efficacy of that view.
A look at major splits within Indian business families over the last 30-40 years suggests that many of them may have actually been value accretive for the members as well as the shareholders of their companies.
The Bajaj family, for instance, is a perfect example of how the sum of two parts is far bigger than the original from which they broke off as part of the late Rahul Bajaj’s wise decision in 2006 to create two distinct businesses lines, each headed independently by one of his two sons Sanjiv and Rajiv. Today Bajaj Auto headed by Rajiv Bajaj is a leader in the two-wheeler segment, while Sanjiv Bajaj has steered the fledgling two-wheeler financing business into a financial services powerhouse. The significant thing about the splitting of their roles and responsibilities is how neither brother had to worry about convincing the other when making tough calls such as the 2009 decision by Rajiv Bajaj to stop manufacturing scooters.
If a surgical split in this case scotched the possibility of a future feud, in many other cases they have also served to end simmering discontent within families which if allowed to go unchecked would have destroyed them from within. The decision by the Hinduja brothers, Srichand, Gopichand, Prakash, and Ashok, that come what may, they would always stick together as a family actually paved the way for future discord. Six years after they agreed in a letter that any asset that belonged to one of them belonged to them all, it became the bone of contention. Srichand’s daughters Vinoo and Shanu went to court questioning the validity of the agreement now that their father was suffering from dementia. A split at the right time might just have saved the once-mighty Hinduja group from being embroiled in the current fight for assets and control.
A clean break also helps to separate the wheat from the chaff, allowing the more competent of the family members to carve out an independent business career without the burden of a dysfunctional part to drag them down. Ranbaxy, after the untimely death of Parvinder Singh in 1999 at the age of 56, was a company clearly headed for the doghouse. Run by self-seeking executives, and Singh’s sons who neither shared his vision nor his ability, its sale in 2008 under dubious circumstances, was par for the course. It effectively brought an end to Parvinder Singh’s part of the business for which he had fought with his own father Bhai Mohan Singh. After his death and the sale of the company, his sons Malvinder Singh and Shivinder Singh found themselves embroiled in court cases amidst allegations of fraud and money laundering.
In all this, his brother Analjit Singh, who had a bitter and public falling out with Parvinder Singh’s wife and sons, must have been relieved that he was no longer associated with that part of his family. He successfully entered and exited newer businesses ranging from telecom to insurance even as Parvinder Singh’s sons made a hash of their inheritance and a third brother Manjit Singh ran Montari Industries aground. Analjit Singh, by contrast, could build a vast fortune from strategic and smart exits thanks to the trifurcation of the business, no matter how contentious it might have seemed then.
A surgical split at the right time can also be beneficial in retaining a modicum of relationship between the members. A business family is ultimately a family first, and only then a business. Timely splits in the Munjal, Bajaj, and Jindal families ensured they could still get together for non-business events over a meal or a wedding. Leaving it too late can kill the personal along with the professional.
A divorce isn’t a pleasant thing but if it brings an end to an unhappy marriage, it may be worth the pain. It is time to remove the taboo around break ups in business families.
Sundeep Khanna is a senior journalist.
Views are personal, and do not represent the stand of this publication.
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