Mint Explainer: What sparks family feuds in Indian corporations?

livemint.com:

Subscribe to enjoy similar stories. A spate of family disputes in India’s corporate sector – involving the KK Modi family, the Oberois, the Kalyanis, and the Chhabria brothers at Finolex Cables – has captured public attention. These high-profile battles for ownership and governance highlight critical issues around succession planning and the lack of corporate governance structures in India.

Though family-run businesses are ubiquitous in India, a staggering 97% lack formal family constitutions or succession planning, according to a 2018 report by BAF Consultants. PwC’s Family Business Survey 2023 found that only 60% of Indian family business leaders have implemented formal governance structures. Mint spoke with experts to examine the causes of these disputes and explored how improved succession planning and governance frameworks could help avoid legal battles and maintain business stability.

Family feuds in large corporations are typically triggered by several interrelated factors. One major cause is ambiguous or absent succession planning. Ruby Singh Ahuja, senior partner at Karanjawala & Co, said, “The war of succession often lands in court when the new generation is ready to take over.

The death of a patriarch can lead to intense disputes among heirs." This is evident in the Oberoi and Chhabria cases. Also read: Financial disagreements also play a major role. Differences in vision and management style can create rifts among family members.