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Source: HBO.com

“I’m not saying I’d make a better CEO. That’s unsaid.” – Connor Roy

At the time of publication, we are just a few days away from the release of the final season of HBO’s highly acclaimed family business drama, Succession. For many viewers in India, the show’s portrayal of the perils and tribulations of running a family business hits uncomfortably close to home. Many would say this show is an example of art imitating life. Others may see it as a docudrama about their family business. It is a poignant example of what can happen without a clear succession plan, and it packages together many common issues faced by many Indian family businesses – such as an aging founder who is unwilling to cede control or induct his middle aged children, a failure to modernize (as seen in many older media houses that are going through similar existential dilemmas), siblings squabbling for the CEO role, and a founder family & business enthralled in multiple full-blown crises.…

Continue Reading HBO’s Succession: Reel-to-Real life lessons for Indian Family Businesses

Fund structures are gaining popularity among wealthy individuals in India as optimum structures to help with wealth planning, investments, and tax management. Family offices are viewing GIFT City, India’s first international financial services centre (“IFSC”), for the purpose of facilitating global investments in a structured manner. …

Continue Reading IFSCA Relaxes Rules for Family Investment Funds in GIFT City

SEBI Directive on Promoter Group

In April 2022, the Securities and Exchange Board of India (SEBI) issued a directive (SEBI Directive) to the Association of Investment Bankers of India (AIBI) and some of its members on ways in which IPO bound companies could seek exemptions in relation to ‘promoter group’ disclosures in IPO offer documents.

In addition to introducing a further layer of complexity to the process of taking a company public, the SEBI Directive has reignited discussions on the relevance and significance of ‘promoter group’ as a concept.…

Continue Reading SEBI Directive on Promoter Group: Another spanner in the works?

Vanaprastha

“Essentially the idea was to withdraw from a place that has four walls. You do not want to live in four walls, because four walls create a false sense of immortality. If you are already in a box, it gives you a coffin-like feeling. When you live in a coffin, you think you are going to be here forever.”

– Sadhguru…

Continue Reading A Promoter’s Vanaprastha: Trust the Process!

Promoter reclassification - Family feud An area of concern

The Indian business landscape mainly comprises of family run businesses. Keeping in mind the close-knit joint family culture in the country, Indian regulators have been particularly cautious of family members owning and controlling a business together. The Securities and Exchange Board of India (SEBI) has, in Regulation 2(1)(pp) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, given a broad definition of “promoter group”, which includes any immediate relatives of the promoter and entities where such relatives have more than 20% stake. Being a member of the promoter group of a listed company entails rigorous disclosure and compliance obligations under various SEBI regulations. In fact, SEBI has in its Consultative Paper dated November 23, 2020, made a noting that there is a need for further clarification under Regulation 31 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR), with regard to disclosing names of persons in promoter/ promoter group who hold even ‘Nil’ shareholding in the listed company.
Continue Reading Promoter reclassification – Family feud: An area of concern

Amul India - Oprah Meghan Markle
Image Source : Amul India

The Private Client team at Cyril Amarchand Mangaldas shares their comments and opinions shared in an article in the  following article which was published by Family and Businesses Magazine and the online edition of the same can be found here.

By now, many of us would have seen the explosive interview between the Duke of Sussex Prince Harry and the Duchess of Sussex Meghan Markle, with television talk-show royalty Orpah Winfrey. The focus of the interview was on the troubled relationship that Mrs. Markle has with the Royal Family and Her Majesty The Queen, and her difficulties in settling into the roles expected of her. At its simplest, apart from being an exit interview of a disgruntled ‘employee,’ the interview echoed what many Indian spouses go through when they marry into a family business – to quote the New York Times – “The struggles of a glamorous, independent outsider joining an established, hidebound and sometimes baffling family firm”. …
Continue Reading Meghan Markle, Her Majesty, Oprah & The ‘Firm’: What Can Indian Family Businesses Learn from Them?

Blog Image_Why Family Offices need to think beyond money

The Rockefellers are quite possibly the most well-known industrialist family in modern history, whose family name is synonymous with staggering wealth and power. Starting in 1882, the Rockefellers set up an office of trained professionals to handle their wealth. Although never formally called a “family office”, this idea was the seed that gave rise to the concept in modern times as several wealthy families began to follow suit.
Continue Reading Why Family Offices need to think beyond money: The importance of Family Governance – Part 1

In India, the law and practice in relation to property and inheritance have traditionally been more patriarchal. Unfortunately, married daughters were quite often not regarded as the heir apparent to a family’s estate and business; and sons continue to be the ‘chosen ones’. Many business families remain reluctant to pass their business wealth and assets onto their married daughters due to the perceived risk that the property ends up being controlled by the in-laws of the daughters. This becomes even more pronounced for ‘promoter’ families with significant holdings in public listed companies. How can such Promoters pass on their business wealth to their daughters, and can they do so without losing control over the company?…

Continue Reading SEBI clarifies status of married daughters becoming promoters in listed companies

In recent years, the issue of corporate governance in India has been a hot topic of discussion. As India Inc. has grown by leaps and bounds, corporate India’s attention has evolved from simple ‘management’ to ‘governance’, and now ‘effective governance’. Given the unique challenges that India Inc. faces due to the predominance of family run businesses, there is a pressing need to move from the ‘Raja’ and ‘Praja’ model of governance (wherein the self-interests of the promoter family precedes the interests of other stakeholders) to the ‘Custodian’ model of governance (which is designed to serve the interests of all stakeholders). While some promoters have consciously worked hard to establish a “Ram Rajya” (a democratic-righteous rule), many are still reluctant to yield power and fear that it may lead to an abdication of their throne.

Kotak Committee

In June 2017, Securities and Exchange Board of India (SEBI), constituted a high powered committee under the chairmanship of Mr. Uday Kotak (Kotak Committee) with the aim of improving governance standards of Indian listed companies which came out with detailed recommendations (Kotak Report)[1]. The legal experts on the Kotak Committee included our Firm’s Managing Partner, Mr. Cyril Shroff.

On March 28th, 2018, SEBI’s Board decided on these recommendations whereby (i) 40 out of 80 were accepted without any modifications; (ii) 15 were accepted with modifications; and (iii) 18 were rejected.

Kotak Committee – Key recommendations accepted by SEBI

The Kotak Committee suggested numerous amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which will consequently impact all listed entities. In this article, we dissect some of the critical proposals and their impact on Indian Promoters. For a full list of recommendations accepted by SEBI, please refer to the press release[2].…

Continue Reading India’s Tough New Corporate Governance Regime – Impact on Promoters

Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime.

–  Anonymous

Philanthropists the world over have been inspired by this simple but powerful statement, and have evolved from undertaking traditional notions of charity to philanthropy and now more recently, towards impact investing.

Impact investing bridges the gap between pure charity and donations for social, environmental and other causes, and pure investment aimed only at financial gain. As the world and, in particular, India, braces itself to battle increasing demand but diminishing resources, the deployment of monies in a manner that helps solve societal problems and conserve resources is not a luxury, but an urgent necessity.

Impact investing is an idea whose day has come. Mahatma Gandhi believed that the rich should be custodians of their wealth for the benefit of society, leading to a more egalitarian world. In this article, we explore why Indian family offices – being custodians of family wealth – should embrace impact investing that embodies this Gandhian philosophy. In doing so, they will not only contribute to society but also extend family legacies beyond the board room.

Impact Investing

The World Economic Forum describes impact investing as an approach that intentionally seeks to create both financial return as well as positive social and/or environmental impacts that are actively measured. The term is often used narrowly as an asset class, but, in fact, it represents an investment approach or philosophy by which investments are made across asset classes. Such asset classes include venture capital and private equity, social impact bonds, municipal bonds, real estate and contribution to social venture funds.…

Continue Reading Impact Investing by Family Offices