As families that control various companies and businesses grow, some members of the larger family, usually in the second or third generation, choose to separate and go their own ways. This is not a recent phenomenon but has been the normal (and even inevitable) practice, over hundreds of years.
The properties, physical assets, like raw materials and stocks and monies are relatively easy to divide. But in modern businesses, it is the intangible, but very real and valuable assets, like brand names and loyal customers that often cause issues and serious disputes between family members. And modern stock markets over the last 150 years, began to ascribe real and very large values to names and brands. Often the family names got transformed into the brands themselves. Globally, think Cadbury or Barclays in UK or Kellog, Mars and Sears in the US. At home it is family names like Tata, Birla, Godrej, Bajaj, Kirloskar and Oberoi, amongst many others that morphed into very valuable brands.
In earlier, simpler times, more so when family bonds remained strong even when businesses separated, the family name was often not an issue. For example, the Birlas happily separated their business interests amongst different branches of the family, allowing each family to continue using the name Birla in the companies allocated to each family, as also in any new companies registered by any of the branches. And that continues till today even with the third generation, after separation in charge! More recently the Godrej family divided their businesses but recorded a sensible and amicable arrangement, allowing both branches to continue to use the Godrej name. As also did the Chennai-based TVS family
But there have also been family battles, fought out in the courts, by separating family members, on the use of the family name. The Kirloskar ongoing squabble has been making news for a while.
It is against this background that the ongoing court cases between the Lodha brothers, members of one of India’s leading real estate companies, must be seen. Even though ostensibly there was an agreed separation, both sides are now alleging breaches of the agreements arrived at. But in this case, it is even more surprising that the matter has reached the courts when their father, Mangal Prasad Lodha, a leading figure in the BJP in Mumbai, is alive and still very active, though in politics! Hopefully, the brothers will see sense in settling rather than in litigating endlessly.
As the corporate sector grows in India more such types of conflicts are bound to come to the fore. And apart from issues being raised about fair division of businesses and assets, the valuable intangible assets, like brands, will see arguments and litigation.
One can only hope that the rational captains of industry will see fair and sensible ways of resolving differences before they become raging disputes, adding a further burden on our courts