The Hinduja brothers have always presented a united front, whether in the management of regulatory authorities across continents or in their business structure. That is why the news of a possible rift in the family over the past year causes gullibility. The ongoing internal problems in the family have many lessons for succession planning as well as managing family businesses, especially when there are multiple heirs in the same family.
The latest emerging news after London’s law courts intervened to broker peace suggests a truce has been reached, no matter how hard it may seem. The courts intervened when it became clear that the family’s paternal grandfather, Srichand P. Hinduja, was suffering from dementia because of the war, and had left his immediate family branch without access to the group’s cash flow.
The starting point for the dispute appears to be the enigmatic agreement signed by the four brothers in 2014: “Everything belongs to all and nothing belongs to none.” evidence. The contract invokes the traditional spirit of trusteeship, a socio-economic concept popularized by Mahatma Gandhi, which inherently discourages individual ownership of wealth or property, encourages custodial behavior and provides equal protection to all community members. In this case, all the assets of the group belong to the four brothers – “everything belongs to all” – and, by extension, to all members of the family of the four Hinduja brothers.
Cracks began to appear following the onset of Srichand’s age-related ailments and his perceived inability to manage some of the group companies; Other brothers then stepped in and tried to manage these properties. This led Srichand’s family members – his wife and daughters – to request the court to set aside the agreement. His allegation: Srichand’s family was being denied their rightful share of the earnings.
There could be another possible reason for the crack. Srichand’s three brothers – Prakash, Gopichand and Ashoka – may not have been part of the same spiritual journey, failing to understand the universality of the message; or its permanent, inviolable feature. Continuing the same logic, treaty imports were perhaps even less understood by the second and third generations. After the unfortunate demise of his son Dharam Hinduja some 30 years ago, Srichand was deeply traumatized, which intensified his spiritual quest. In that sense, some of his self-realization in later years may be lonely and not shared equally with his brothers, thereby sitting with “Sab sabka sabka hai”.
Whatever the reasons for the visible rift, or the court-mediated peace clauses that remain confidential, it holds an important lesson in succession planning for family-owned businesses.
The origins of the Hinduja family feud, perhaps, can be traced to the way the Hinduja family was perceived in the public eye: Srichand always being in the lead, taking care of the rest of the family and taking all the important decisions. All alliances and associations – strategic or tactical, local or global – had to first pass the Srichand smell test; He would listen to all suggestions, take advice and finally take a decision that would be binding on everyone in the family, near or far.
This patriarchal structure not only emerged from tradition, but was strengthened by the difficult circumstances through which Srichand had to run the family businesses. He took over the reins of the group at the age of 36 after his father Parmanand Hinduja died in 1971. The second blow – perhaps the harshest – came soon after in 1979 when a popular uprising in Iran replaced the ruler of the Pahlavi dynasty. an Islamic republic.
Parmanand Hinduja had established extensive business ties with Iran, including opening offices in the country in 1919 and later moving the group’s headquarters there. The revolution of 1979 forced Srichand to shift the office to London. It was not just a simple issue of relocating the physical office; The government of Iran has historically been the group’s major trading partner, and the 1979 revolution left a large gap in the group’s balance-sheet. Srichand rebuilt it all, brick by brick, across national boundaries and jurisdictions.
Srichand also helped clear some of the latter’s other clouds over the family business, including allegations of impropriety. The group’s dependence on Srichand was complete and undeniable. As a result, “everything belongs to all” did not tolerate any resistance or opposition from either brother, regardless of how inadequate the agreement was for future succession planning.
Ideally, Srichand should have drawn up a detailed succession plan for each member of the Hinduja Third Generation, many of whom have already been involved in the management of various group companies. There were many templates and examples already in existence. The bitter, protracted and public disputes between the second and third generations of the Delhi-based DCM group were due to the lack of proper succession planning. In contrast, GD Birla’s carving out of the Birla Empire during his lifetime significantly reduced friction between various sons and nephews, even though the division of property was not to suit everyone’s aspirations.
An elaborate, planned succession strategy might have saved the Hinduja family from the stigma of court arbitration, after decades of projecting a united front.
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