When families fail


Is all really fair in love and war?

When it comes to warfare between siblings, or in families, there is often little that is fair or reasonable. As seen in many a Bollywood movie, and within India’s political dynasties, family feuds often erupt without reason, and they can be bitter and long lasting.

But what of feuds within families and groups at the helm of companies? As seen in India, warfare between siblings and other individuals for control of corporate assets is brutal and can have adverse consequences for the businesses involved. In recent months at least three large corporate entities have been in the news as a consequence of boardroom battles – the most recent being the US$5 billion Chennai-based Murugappa Group, where there is an ongoing battle to obtain representation in the boardroom for female heirs.

Perhaps such warfare is inevitable, given that the majority of India’s companies are run by families. But is this ideal?

This issue’s Cover story highlights the on the ground reality within India, where high net-worth individuals (HNWIs), many of whom control companies and businesses, have been voting with their feet and shifting their capital overseas. This is not entirely new, but these individuals are now increasingly seeking professional advice as their efforts become more organized and sophisticated. Prominent private practice lawyers have seen their needs evolve as Western influence and concepts make an impact. “Trust structures, trust laws, trustee companies … everything in Europe is well oiled,” says Abhijit Joshi at Veritas Legal. “In India, it is evolving.”

Lawyers who are moving into this area of practice are discovering private clients come in all shapes and so, too, do their enquiries and motivations for wealth management advice. The challenge is providing value to clients while remaining mindful of the particular stresses and strains that characterize the landscape in which these individuals have established themselves.

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