Billionaire’s Battle of Inheritance Focuses on India’s messy family heirs

The sudden death of an Indian tycoon in June triggered a fierce succession battle between Indian auto giants.

Sunjay Kapur, 53, suffered a heart attack while playing polo in Surrey, England on June 12. He is the heir to Sona Comstar, a business empire of $3.6 billion (£2.7 billion) inherited from his father. The company has a global footprint among India’s top automotive component manufacturers, with 10 factories spread across India, China, Mexico and the United States.

Kapur, a polo enthusiast, moved in among the elite social circles in the Indian capital Delhi, and reportedly shares friendship with Prince William. He got married three times – first by designer Nandita Mahtani, then by Bollywood star Karisma Kapoor from the 90s, then married former model and entrepreneur Priya Sachdev in 2017, and then with Priya Sachdev in 2017.

But a few weeks after his death, inheritance issues have made Kapoor and his family a subject of media speculation.

Kapur’s mother Rani Kapur is former chairman of Sona Comstar.

On July 24, Rani Kapur wrote to Sona Comstar’s board of directors, raising questions about the death of his son and the appointment of the company.

In a letter seen by the BBC, she claimed Kapur’s death was “highly suspicious and unexplainable.”

Surrey’s coroner’s office told the BBC that after the autopsy, it determined that Kapoor died of natural causes. “The investigation has been closed,” the office said.

Rani Kapur also claimed that he had been forced to sign key documents due to the psychological and emotional distress of his son’s death.

“Unfortunately, while my family and I are still mourning, some choose this as an appropriate time to master control and usurp family legacy,” she wrote.

She also asked Sona Comstar’s board of directors to postpone its annual general meeting of shareholders (AGM) (scheduled July 25) to decide on a new director who will be the representative of the family.

Rani Kapur didn’t specify that she meant “some people”, but anyway, Sona Comstar held the annual shareholders’ meeting the next day and appointed Priya, Sunjay’s wife, as a non-executive director.

Rani Kapur claimed in the letter that she was the sole beneficiary of her late husband’s property, and the will was left in 2015 and included a majority stake in Sona Group, including Sona Comstar.

The company strongly denied Rani Kapur’s claims and said she “had no roles, direct or indirect roles in Sona Comstar since at least 2019”.

The board also said there was no notice to force her and that the annual general meeting was “fully compliant with the law.” The company has issued a legal notice to Rani Kapur asking her to stop spreading “false, malicious and destructive” statements.

The BBC contacted Sona Comstar, Rani Kapur and Priya Sachdev.

Public shareholders, including banks, mutual funds and financial institutions, hold 71.98% of Sona Comstar, which is listed as Sona BLW on the Indian Exchange.

The remaining 28.02% is held by the promoters through a company called Aureus Investments Pvt Ltd.

According to the company’s filing, Sunjay Kapur is the sole beneficiary of the RK Family Trust, which controls the promoters’ stake in Sona Comstar through Aureus Investments.

“Looking at the company structure, at this time, Rani Kapur is not a registered shareholder and therefore will not have any voting rights. But there are issues with RK family trusts and financiers’ investments. We don’t know if Rani really holds any direct interest before the agreement is made public,” said Tushar Kumar of India’s Supreme Court, whether the agreement is public. ”

The Kapoor family hatred is not an isolated case.

According to a survey by PwC, about 90% of listed companies in India are family-controlled, but only 63% have formal succession plans.

Kavil Ramachandran of Indian Business School said most Indian family businesses have “important ambiguity about details”.

He added: “Who owns such an area and who inherits it.”

Experts say that family involvement has no elite management and no formal agreements complicates things.

“With the demise of the patriarch (even before), there will be disputes in ownership and management, and there is too much water flowing under the bridge to solve the problem friendly,” Ketan Dalal said.

Indian companies have repeatedly captured the headlines with a painful battle of succession.

Mukesh Ambani, the richest man in Asia, was once trapped Public power struggle After his father, his younger brother was in a huge empire of dependence Dhirubhai Ambani died in 2002 No will is left. A few years later, it was their mother, Kokilaben, who led to the peace.

Recently, family hatred broke out in India’s most famous textile company, Raymond Group, and the Raymond Group of the Lodha Brothers, whose company built the Trump Tower in Mumbai.

All of this usually brings a huge price to Indian shareholders.

“Anyone with unlimited control in their hands suffers. Ultimately, the stock price fell, and (as well) the feeling of how the company will do in the future,” said Sandeep Nerlekar, founder and managing director of traditional planning firm Terentia.

But now some families have been bitten and are shy twice.

The Bajaj family, one of the country’s largest conglomerates, faced internal disputes until the court stepped in to resolve the dispute in the 2000s.

The patriarch formulated the organization’s succession plan, allocating responsibilities between his son and cousin. According to the company’s statement, the group now operates through consensus through the family board.

Last year, one of India’s oldest commercial companies, the locked-in real estate Godrej Group, announced it was undoubtedly separated from its multi-billion dollar business.

“Families need to use governance structures such as good teeth for succession planning. Some control should be given to keep the business going in the long run. You also need to allow the next generation to take the lead in a timely manner, while the patriarch should take the time to raise them to avoid family problems, so as not to have family problems,” said Mr. Nerlekar.

Someone like Mukesh Ambani seems to be right He has started to modify his three children In advance.

Mr Ramakandland said inheritance cannot be decided “once overnight”.

“Preparing your home and operations teams is crucial during the transition period of your plan.”

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