Family Business Fueds That Shook The Indian Stock Markets

“Blood is thicker than water”. “Family comes above all else”, you might have heard many such similar dialogues. Bollywood or Hollywood, the entertainment industry has portrayed the emotion of unity with family. This applies to the real world as well, or, in this case, the business world.

Money, power, and family: the unholy trinity is the recipe through which family businesses conquer. But, just like every coin has two sides, the unity factor often doesn’t mix well with money and power, resulting in a squabble much more interesting than your daily soap.

So, get ready to dive into the real dynasties of dysfunction—the business families whose feuds make billion-dollar bidding wars look like a kid’s fight. In this article, we will cover some of the most headline-making inheritance fights of all time.

Top Family Business Fights For Inheritance

Without further ado, let’s begin the list:

1. Birla Family Feud

Birla Corporation has been in the business industry since before India found its independence. It was founded by Seth Shiv Narayan Birla in 1857. Things were simple when it came to their succession, but then came the death of one of the pillars of the corporation, Priyamvada Birla. Priyamvada was the widow of M.P. Birla, one of the four Birla brothers who built the empire.

Apparently, in 1999, the late Priyamvada allegedly willed her assets, including the Lodhi Estate, to Rajendra Singh Lodha, bypassing her own family members. The Lodhi Estate, a prime property in the heart of Delhi, was owned by the Birla family and soon became the subject of a long-standing legal battle among the family members.

What came as a bigger shock was that R.S. Lodha, who was married to Priyamvada's niece, was also the will's executor. This turn of events made the situation even more suspicious!

The legal battle ensued after Priyamvada Birla's death in 2004, with her family members contesting the validity of the will. The case involved complex legal proceedings and went through various stages, including the Supreme Court of India.

Despite all the opposition, R.S. Lodha became the chairman of the Birla Corporation and also played crucial roles in his lifetime, including being an independent director on the board of the State Bank of India. Even his untimely death in 2008 didn’t end the rivalry as his son, Harsh Vardhan Lodha, took on the Birlas in the courtroom.

2. Ambani Brothers' Clash for the Throne

It all started as it usually does in these cases, with the death of a business magnate, Dhirubhai Ambani.  After their father died in 2002, disputes arose between Mukesh and Anil Ambani regarding the division of the Reliance empire, aka Reliance Industries.

Dhirubhai Ambani breathed his last breath without signing his will, and the empire he had painstakingly built stood at a crossroads. His eldest son, Mukesh, and youngest son, Anil, were to inherit everything. But what ensued was far from a harmonious transition of power.

Being the eldest, Mukesh Ambani was made the chairman of Reliance Industries, and Anil was appointed as managing director. Anil was not satisfied with the option to answer to his brother and wanted a much bigger share of the meal.

The feud between the two became public in 2004, with disagreements over leadership and business strategies. Things went sour, and at last, they reached the court, where both brothers began to drag each other down to maintain a firm group in the empire. Surprisingly, there wasn't much fluctuation during this period on RIL's stock price. 

But soon, realising that the media was devouring the fight hungrily and businesses were being affected, both decided to solve the matter amicably. In 2005, a formal split divided Reliance Industries, with Mukesh controlling the core petrochemicals and oil & gas business and Anil venturing into telecom and other sectors.

They also signed a non-compete pact till 2010. Throughout the years one big fight or other kept on brewing between the brothers at which point then Finance Minister Pranab Mukherjee advised the two to solve it privately.

Did they succeed? Find out on “Anil Ambani: The Story of Riches to Rags."

3. Singhania Vs Singhania

It all began in 2015, when the patriarch of the Singhania clan, Vijaypat Singhania, found himself embroiled in a battle for control of the Raymond empire. The ageing tycoon's empire stood at the crossroads, with his sons, Gautam and Madhupati, poised for a showdown worthy of the silver screen.

Rewind to 1998, Vijaypati’s eldest son Madhupati decided to move to Singapore with his immediate family, wife Anuradha and four children, Ananya, Rasaalika, Tarini and Raivathari. But before the move, he decidedly relinquished his rights (and that of his children) to the family’s property.

What does this mean? In case of Vijaypat’s demise, his son Madhupati will have no right to inherit a single penny. After that, the youngest Gautam Hari Singhania, was the managing director.

Then, at a good time in his old age, Vijaypat Singhania decided to give the reins of the empire along with his 37.17% stake to his son Gautam. That’s when Madhupati’s children decided to awake from their slumber and demand what they thought was their right.

Talk about hypocrisy! Questioning the Family Agreement signed in 1998, the 4 children petitioned Bombay HC to claim a right to the Raymond brand, ancestral properties, and other assets. 

You may think of Gautam as a filial son in this scenario, but wait as the story is going to take a turn for the worse. Vijaypat fell into dispute with the chairman of Raymond Group. It started with a property deal over JK House and led to the estrangement between father and son.

Even now, the dispute is ongoing, with one headline or another every few months. The impact of the fued was seen in the share price of Raymond Ltd. during the beginning of the 2015.

4. Discord Between Hinduja Siblings

Sibling rivalry is not that big a deal regarding succession arrangements, but there are fewer occasions where two close-knit siblings fight viscously. That’s what happened between the Hinduja Brothers.

It all began in the hallowed halls of their ancestral home, where Srichand, Gopichand, Prakash, and Ashok Hinduja once stood united. But as the clan's patriarch, Srichand, grew older, whispers of discord worth $112 billion (₹9.2 lakh crore) began to rise.

What’s interesting here is that the whole drama began with a piece of paper and no I am not talking about the will. It was a document signed by the four brothers in 2014 which addressed that any asset of one brother would belong to all. Additionally, the document also included the requirement of one brother being the executor to another.

Taking advantage of the letter, the 3 younger brothers, Gopichand, Prakash, and Ashok Hinduja, tried to claim rights over the Hinduja Bank, which falls under Srichand and his daughter Vinoo’s control. Hence, the father-daughter appealed for the letter to be named valueless.

A London judge ruled the decision in Srichand’s favour by making his daughter Vinoo his litigation friend. This means that Vinoo could watch over her father’s assets and “safeguard his interests” as Srichand had dementia.  

5. Godrej Group Division

Last but not least is the story of a group division which is going pretty amicably and without any drama like others on the list. 

In 2002, the Godrej brothers decided to divide the Godrej Group based on their interests. Adi and Nadir Godrej manage Godrej Industries, focusing on FMCG & consumer durables. At the same time, Jamshyd & Smita Godrej lead Godrej Appliances and Godrej Security. A full-on restructuring is taking place, with both sides transferring shares of each other's companies and hence having no control over it.  

The division appears to be a strategic move for focused growth, with the brothers reportedly maintaining a good relationship. Both sides have even signed a six-year non-competition agreement and are in talks to maintain peace even after the pact’s end.

To know about who will get what with the division, read the article; Godrej Goes Solo: How the Family Business Split Will Change Everything.

The Bottom Line

The cases above brought attention to the importance of clear and unambiguous estate planning to avoid conflicts within affluent families. These disputes garnered significant media attention and highlighted the complexities involved in family-owned business empires in India, especially regarding succession planning and inheritance issues.

No matter what, these disputes never fail to provide a somewhat ugly peek into rich people’s lives. It tells us that not everything is sunshine and rainbows, and things are bound to get tough despite your bank balance.

What one needs to do is keep their finances strong and secure without any loose ends. So, are your finances secure? Let us know in the comments.