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Not just brother vs brother. Bharat Forge to Hinduja, women are fighting for family business

In the male-dominated family business world of the past, shareholder agreements largely excluded women. But this is changing.

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Family business conflicts have traditionally been fuelled by men. Brother versus brother like in the Anil Ambani vs Mukesh Ambani battle; or father versus son like Vijaypat Singhania vs Gautam Singhania in the Raymond’s case. However, women, particularly daughters, are increasingly shifting from being passive to more demanding and outspoken in seeking their rightful stake in family businesses—from Bharat Forge to Murugappa to Hinduja Group. This is leading to conflicts.

Bharat Forge chairman and managing director Baba Kalyani’s sister Sugandha Hiremath and her husband Jaidev Hiremath have moved the court for full ownership of speciality chemical company Hikal, where both the groups have a near equal shareholding.

Additionally, the suit seeks the performance of “specific obligations” from Kalyani. Reports say that a past family arrangement requires Kalyani to transfer his stake to the Hiremath family. However, Kalyani points to intervening agreements and the statute of limitations, per which the changes should have been done within a specific period. In another instance, Sheetal Kalyani, Baba Kalyani’s niece, also moved court against her uncle and other kin a few years ago, claiming a share of the family estate and group companies.

At the global Hinduja Group – a paragon of close-knit ties among the four brothers Srichand, Prakash, Gopichand, and Ashok – a family feud broke out around 2020 when Srichand’s daughters, Vinoo and Shanu, tried to claim full control over a Geneva headquartered bank hotly contested by his three brothers.

Vinoo joined the case as Srichand Hinduja’s “litigation friend” while he ails from dementia. The bone of contention was a document signed by all four brothers in 2014, which stated that the shares held by any single brother belong to all four of them. It is the third generation that now largely has operational control over the companies.

Interestingly, there are six daughters and five sons in this generation. There has been a truce recently, but this may not be the final outcome. Many studies on family business longevity suggest that a majority of them do not survive undivided or last beyond the third or fourth generation. Will women now bell the cat and become harbingers of change?

At the Chennai-based diversified Murugappa Group, Valli Arunachalam, the eldest daughter and karta (manager) of the MV Murugappan Hindu Undivided Family (HUF), has upped the ante for fair board-level representation in group company Ambadi Investments despite grave resistance from other members. The shareholders had allegedly rejected a resolution to have Valli join the board of Ambadi Investments, the holding company of the Murugappa group after the death of Valli’s father in 2017. Alleging gender discrimination in the company board room, Valli signalled that she will leave “no stone unturned” to get justice. 


Also read: Women led start-ups always struggled for money. Covid made it worse


Raising and claiming stakes

There are many reasons women are rising in revolt against their powerful families to demand their rightful share in businesses.

First, at the macro level, there have been changes in the socio-cultural and legal ecosystem. With globalisation, education and the growth of feminism, women are increasingly asserting themselves and pushing for their rights. Hindu business families have been traditionally governed by the HUF system. In 2005, amendments were made to the Hindu Succession Act 1956 to end gender discrimination in succession and inheritance.

Further, societal changes have happened with the large-scale disintegration of the joint family system, which allowed a patriarchal system to flourish. The patriarchal thinking was that once a daughter gets married, she becomes part of the family of her in-laws. However, the new Companies Act 2013 made it mandatory for listed firms to have at least one woman director on the board, which was to be made effective by August 2015. There was then a scramble to find qualified women to improve the gender balance on Indian corporate boards.

Second, with economic liberalisation, family businesses have been on a fast-growth track. In the past, the turnover in many companies was too small to make it worthwhile to make a claim for the family business. But all of that is changing today. For example, the annual turnover of the speciality chemical company Hikal is close to Rs 2,000 crore.

Additionally, women in family businesses are professionals in their own right, increasingly going overseas to study business management and related subjects. Baba Kalyani’s niece Sheetal, for instance, is an economics graduate from the Pennsylvania State University.

Third, in the male-dominated family business world of the past, shareholder agreements – contracts among shareholders that give certain rights to them – largely excluded women, with most agreements showing no clarity on their role and stake in the business. But this is changing as women become wiser and more aware of their rights.


Also read: India’s women entrepreneurs look to survive the pandemic by remodeling their business


Way forward

Despite all the progress that we have made as a country and society, creating a level-playing field for women in family businesses will take time. For example, many ‘family constitutions’ (which formally document the rules and principles of family-owned enterprises) still give daughters and daughters-in-law limited roles in company affairs, such as overseeing corporate social responsibility or the corporate foundation. One of the concerns among male family members is the perceived difference in culture in the families their daughters get married into. It is clear from these trends that change can’t be hurried, and that women will only achieve meaningful roles over time.

The legal system in India is slowly but steadily evolving. Changes in the Hindu Succession Act, the abolition of Triple Talaq and the Travancore Syrian Christian Succession Act championed by Mary Roy have all ensured a more liberal environment for women in our society. The proposed Uniform Civil Code (UCC) by the Narendra Modi government will also have repercussions on the role, traditions and influence of religion in society. This change will reflect on the economic and business fronts as well.

Professor Kavil Ramachandran, senior advisor of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business, says that in the future, we will likely see more proactive steps by women in business. He also says that with focus on economic rewards in companies, there will be greater ownership by women in family-owned conglomerates.

The writer is a former editor at the Indian School of Business. Views are personal.

(Edited by Zoya Bhatti)

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