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Delhi Inc: Splits are showing

india Updated: Jul 09, 2006 02:23 IST
Arun Kumar
Highlight Story

The Bhai Mohan Singh family feud is the latest episode in the ongoing saga of feuding Delhi-based business families.

The slug fest between Bhai Mohan Singh’s younger son Analjit, who heads the Max group, and his elder brother Parvinder’s widow Nimmi and sons Shivinder and Malvinder has an all too familiar ring: business families that fall apart after the death of the founder patriarch.

Delhi’s corporate history keeps repeating itself with stories of fissures and divisions in business families. In some cases, the division is amicable; in others, there are lengthy court battles. Some splits actually help the company become bigger and better as management becomes stronger. But in many cases, the business dwindles. Either way, “it certainly affects the fortunes of the company,” says Bakul Dholakia, director, IIM, Ahmedabad.

One corporate lesson has been learnt — the fact that forward planning doesn’t always help. Bhai Mohan Singh, for instance, had finalised a settlement distributing his companies and family wealth among his three sons — the late Parvinder Singh, Manjit Singh and Analjit Singh — while he was still alive.

Ranbaxy was given to Parvinder Singh (along with the 1 Southend Lane property where his sons and their families live), and he turned Ranbaxy into a pharma multinational.

Manjit Singh, meanwhile, got Montari Industries and a number of sprawling bunglows in Lutyen’s Delhi. However, he had to sell off some assets to repay his debts, and the company was closed down.

Analjit Singh got Max India and some real estate and cash. Subsequently, he diversified into telecom, insurance and healthcare. Everything seemed settled. But on the death of Bhai Mohan Singh on March 27 this year, it was revealed that Analjit Singh was to be the sole heir of his remaining property (which includes some Ranbaxy shares, and the Delhi Guest House).

DCM: The irony about the state of DCM is that many of today’s big industrialists have either worked with or been associated with the company at some point in their careers. The HCL group’s Shiv Nadar, for instance, began his career with DCM Data System. Today, his group has a combined market cap of Rs 20,000 crore and gross revenues of over Rs 12,000 crore. As for DCM? The split empire has revenues of around Rs 7,000 crore.

The DCM group was split among Shri Ram’s three sons: Murli Dhar, Bharat Ram and Charat Ram. Murli Dhar’s portion was split between his two sons

Bansi Dhar (who got DCM Sriram Industries, now being managed by his three sons) and Sri Dhar (who got DCM Sriram Consolidated, that is now managed by his two sons).

Bharat Ram got the flagship DCM Ltd and SRF. This was divided among his three sons Vinay Bharat Ram, Arun Bharat Ram and Vivek Bharat Ram. While Vinay got control of DCM and the IT business, Arun got SRF (the largest company in the group with a turnover of Rs 1,500 crore), and Vivek took over DCM Benetton, DCM Finance and the education business under the banner New Horizons.

Charat Ram’s fortune was also divided between his sons Shidharth and Deepak. Shidharth Sriram is managing SIEL and Mavana Sugar while Deepak controls Sriram Piston.

ESCORTS: The going at the Escorts group was good as long as HP Nanda was running the show. The group had joint venture (JV) partners like Hughes Software, JCB, Goetze, Yamaha Motors etc. There was also Escorts Hospitals as a trust. HP Nanda’s sons, Rajan and Anil, went their separate ways with Anil getting Goetze, and Rajan getting Escorts. Rajan decided to divest the hospital business and converted the trust into a company. Anil also decided to divest his holding from Goetze and is now he running a real estate company.

MODIS: The Modi group is another case in point. The Modis, nine of them when they split in 1989, could never pick up the pieces of a dismantled empire that had interests ranging from chemicals to sponge iron. There was even had a town named after them. After the death of patriarch Gujar Mal Modi, his brother KN Modi took over, and soon there was tension between him and his nephews. GM Modi’s five sons and their uncle’s sons had a bitter split in 1989 — because, as one of the Modis had put it then, “there was no unanimity in terms of business decisions and investment plans”.

The family has further expanded. One of GM Modi’s sons, KK Modi, who controls Godfrey Phillips, has two sons Samir and Lalit looking after Modi Entertainment and Modicare respectively. And barring a few exceptions, most of the Modi group companies are nowhere close to being India top companies. Modi Rubbers, one of the leading tyre manufacturers in India and the flagship company of the undivided Modi family, is closed today.

In the cases of Raunaq Singh (of Apollo Tyres) and the Thapars, the next generation took over the reins of the groups and took them up the value chain. In fact, with the Thapars it was an amicable split where LM Thapar gave the control of the flagship company his nephew Gautam Thapar. In their case, it was all’s well that ends well.

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