Family fracas

It’s boom time in India – the economy is doing well despite a not-so-encouraging monsoon, the stock market is shining and has crossed 6,000 points this week. Foreign portfolio investors are flocking to the country in droves – what was a trickle last year has turned into a torrent now. From a low 30-35 last year, the number of foreign portfolio investors has ballooned to more than 130 by the latest count.
Indian corporates are recording good growth in spite of the average monsoon and are making good profits and rewarding their shareholders well. Some of the big boys are casting their eyes abroad. Looks like India’s family owned conglomerates are turning into true-blue multinationals finally. But the flip side can be as bad. Indian corporates are now in the news for the wrong reasons. First it was the blue-blooded Birlas squabbling over the remains of the riches of a widow who gave away all her money and companies to an outsider. The Birla clan is now fighting it out in the courts, which could, well, take some time to reach a conclusion. In the meantime came the BPL family drama. The first-generation entrepreneur falls out with his son-in-law, accuses him of plotting to take away one of his companies. Accusations fly thick and fast. So much dirty linen was washed in the press and courts before the duo settled for an out-of-court deal.
Barely had the ink dried on the report of the BPL settlement comes the report of the schism between the two brothers running the Reliance empire, India’s biggest conglomerate. On Thursday Chairman Mukesh Ambani admitted to differences regarding ownership issues with his brother and vice-chairman Anil Ambani. At stake is the Ambani family's 46.67 per cent equity in Reliance Industries, now worth $7.92 billion (Rs 355.52 billion). According to Mukesh, Reliance is a strong, professionally managed company and has moved beyond any one, two or three individuals, including himself. So there is no reason for investors to panic. That is easier said than done since reports say the empire-builder, the late Ambani Senior, died intestate. The stock market reacted sharply on Friday. Shares on the Bombay market fell, led by a sharp fall in Reliance Industries, which closed 3.4 per cent lower. With the stakes so loaded in the unravelling Amabani family drama, is India Inc. just about to witness another round of sordid washing of dirty linen, particularly when the protagonists are considered among the cream of the Indian industry. Surely not something the old man would have liked and is best avoided.

This is an editorial published in Oman Tribune