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Splitsville:
the business of family feuds
All happy families are alike; all unhappy families are unhappy after
their own fashion. As the Ambanis heave and ho, Tehelka takes a look at
conflicts in other corporate clans Naresh
Minocha
New Delhi
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| Kumaramangalam,
Aditya Birla and BK Birla india today photo |
The façade of
the Birlas came apart in the 1980s when KK Birla decided to give his Sutlej
Cotton to his daughters. This immediately led to suspicions that the company
might go out of the family’s hands, because the sons-in-law were not
from the Birla clan.
The threat that the Birlas felt over this led to the famous 1988 meeting
in Kolkata.
Eight members of the Birla group were present. It was officially put out
that the meeting decided to make things simple for future generations by
dividing the group.
The group had become too unwieldy to be managed by investment companies
that held shares in several companies. Shares were held by almost everyone
in the family, and anything anyone did quickly came under suspicion.
The founder of original Birla group was Raja Badeodass Birla, who died in
1956. His four sons, Jugal Kishore, Rameshwar Das, Ghanshyam Das, and Brij
Mohan, were successful businessmen.
Jugal Kishore had no children and left his fortune to religious trusts.
Rameshwar had two sons Madho Prasad (MP Birla) and Gajanan.
The MP Birla group has been hogging headlines in recent months following
the death of MP Birla’s widow Priyamvada and her controversial will
handing over the group to auditor RS Lodha.
Gajanan’s son Ashok Birla died in a plane crash years ago, leaving
the Ashok Birla group for his son Yash Birla, whose flagship company is
Zenith Limited. Apart from these two tertiary branches of larger group,
there is another such branch originating from third second-generation brother
Brij Mohan, whose son is GP Birla. GP’s son is CK Birla and their
flagship company is Hindustan Motors.
Suspicion
that KK Birla would
hand over the group to
outsider sons-in-law led to the
Birlas eventually parting ways |
The core of the Birla empire developed around GD Birla, the most well
known and successful of the four sons of founder RBD Birla. GD Birla’s
sons are Lakshmi Niwas, Krishna Kumar and Basant Kumar.
Lakshmi’s son SK Birla and grandson Siddarth have Birla vxl as their
flagship company known for the OCM brand of suiting.
KK Birla’s flagship is the Zuari-Chambal Fertilisers combine and
the Hindustan Times. His move in the 80s to distribute ownership of his
companies’ shares was one of the factors that hastened the split
in the Birla empire.
BK Birla group’s flagship is Century Textiles. His son Aditya Birla
had his own identity with Grasim, Indian Rayon and Hindalco. Kumarmangalam
Birla now controls the Aditya Birla group. So today there are seven Birla
groups with their own brand equity.
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December
25, 2004
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