Family business feuds have been there for a very long time, but they have gained momentum since the 1980s. Consider some of the instances: between father and son (Ranbaxy and Apollo Tyres), amongst siblings (Charat Ram, Bharath Ram and Murli Dhar of DCM), and within extended family of cousins (Hero’s Munjals and the Bajaj family). There have also been the occasional battles between uncles and nieces (Hindujas). But acrimonious feuds between husbands and wives had so far been far and few. Not anymore.
In recent years, Max India’s Analjit Singh and his wife Neelu; Sona Comstar’s Sunjay Kapur and his second wife Karisma Kapoor, Zoho Corporation’s founder Sridhar Vembu and wife Pramila Srinivasan, and Raymond’s Gautam Singhania and his wife Navas Modi Singhania, have been some of the high-profile battles between husbands and wives.
But the new fracas in the TVS family group has brought the issue into the mainstream. It is not just between Venu Srinivasan and his wife Mallika, but also includes their children — son Sudarshan is aligned with his father while daughter Lakshmi and her mother are in the opposing camp. In fact, Mallika is actually fighting on behalf of Lakshmi to get her share in TVS Motors.
This dust–up is interesting from another perspective too: as the daughter of late A Sivasailam of the Chennai- based Amalgamations Group, Mallika inherited a significantly sized business and is the chairman and managing director of Tractors and Farm Equipment (TAFE), while Lakshmi is the tractor firm’s vice-chairman. Among other roles, Mallika is also the chairman of the Public Enterprises Selection Board (PESB). Clearly, Mallika and her daughter Lakshmi are no easy pushovers.
Venu Srinivasan, on the other hand, is in the spotlight now for a completely different reason: his controversial role in the boardroom battle in the Tata Group. From winning the Deming Prize to serving as the president of the Confederation of Indian Industry (CII), he symbolised everything that was noble and noteworthy.
Why now?
The roots of most of the cases involving the spouses of businessmen seem to emanate primarily from inter-personal issues and marital discord. But the latest brouhaha in the TVS Group has put the spotlight beyond familial ties to hardcore business issues, division, and role in family business.
Kavil Ramachandran, noted family business professor and senior advisor at the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business (ISB), Hyderabad, told ThePrint, “Today, most business leaders and entrepreneurs consider their business ventures as the most important part of their lives in terms of social identity and wealth and often forget to spend enough time with their partners to continually strengthen their relationship.”
Leading corporate and climate change lawyer, Susha Stephen, added that “historically, even though the Constitution of India protects women’s rights through Article 14 (equality before the law) and Article 15 (prohibition of discrimination on grounds of sex), patriarchy prevailed over laws and legal recourses, prompting gender inequality.”
New legislations enable women to gain prominent roles and visibility within companies and outside. Stephen added that “court rulings in divorce matters now mandate full disclosure of the assets by parties for an equitable division of assets. Consequently, women are no longer ignorant of the wealth disparity. They are cognisant of their contribution to the growth of the business, be it as a benami holder of assets for tax planning or for compliance of legal provisions or active participation in the business.”
What’s ahead?
A family business co-owned and co-managed by spouses has many advantages. Yet, as we have seen above, it is not an easy possibility. But counselling and self-awareness of the partners, establishing and implementing strong governance mechanisms including more independent female representation on boards, and external mediation processes can help make the husband-wife relationship work.
Build strong family relationships: Professor Ramachandran says that marital relationships have become more fragile and unstable in recent years as there is no longer any stigma associated with it. So, exiting a marriage is simpler in many ways now than in the past. He adds that “trust is fundamental to building and maintaining any relationship. As people change in terms of their priorities and emotional connectedness over time, challenges to preserve trust are more and efforts required to retain relationships are greater. Frank and clear communication between individuals cannot be taken for granted, especially in an equal partnership.”
Establish robust strong governance mechanisms: The need to raise the governance bar is real and urgent. Family businesses today face a fundamentally different environment today — institutional capital, global competition, regulatory complexity, and generational succession — that a rubber-stamp board simply cannot navigate. Good governance in a family business begins with an effective board.
According to Sidhya Senani, CEO of the Gurgaon-based family business advisory BAF Consultants, “Most family business boards in India are still what we call ‘chai-coffee boards’ — they exist for namesake, typically to meet compliance requirements. Even some well-known listed family businesses have such boards.” The implication is clear: family businesses in India still have a long way to go when it comes to professionalising their boards.
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Enforce regulations and promote mediation: Despite the Supreme Court’s judgment in the Mary Roy v. State of Kerala (1986) case, which gave equal property rights to women from Kerala’s Syrian Christian families, enforcing the order has been a challenge.
Similarly, experts say that the Uniform Civil Code (UCC) could have an adverse consequence to women’s inheritance rights. Advocate Stephen says that there has been a noticeable increase in the registration of wills that prevent daughters from inheriting property and wealth in intestate situations.
Tara Ollapally, co-founder of CAMP Arbitration and Mediation Practice, said, “To ensure the longevity and harmony of family enterprises, mediation must not be a mere consideration but an unequivocal imperative. It is the proactive and strategic approach that transforms disputes into opportunities for constructive dialogue, steering family businesses away from the destructive path of litigation.”
George Skaria is the former Editor of Indian Management and Asian Management Review. Views are personal.