Friction #9: Family businesses and the dilemma of the small investor
Sundeep Khanna
27 October 2020

In December 2017, shares of real estate company Omaxe Ltd were trading at around Rs 230 apiece. Over the next few months, an ongoing family fight erupted in full public view with Sunil Goel, who had earlier been evicted as joint managing director, dragging his brother and group chairman Rohtas Goel to the National Company Law Tribunal, after accusing him of “financial mismanagement” and “fraudulent transactions”. Since then, the firm has eroded nearly 70% of its market value to the detriment of its public shareholders.

It is an all-too-familiar tale. Whatever the causes and the consequences may be for the participants themselves, infighting in a business family is invariably value-destroying for the outside shareholders. Families fight over control, succession, funds, or merely because of egos. But like the grass between two irate bulls, it is the shareholders, particularly the small ones, who get hurt the most. 

Indian business history is littered with instances

What our readers say
Why subscribers love The Morning Context
High quality, independent journalism is rare to find. The Morning Context set really high standards that make me wait for each story.
Abhay Pandey, Managing partner, A91 Capital
Well-written and researched long form reads on a wide variety of topics and a team of veteran journalists - all of this makes my subscription worth it.
Anupam Gupta, Investment research consultant
In today's very noisy and cluttered world, I like that the Morning Context goes below the surface of company PR to deliver fact-based stories on Indian business.
Jessie Paul, CEO, Paul Writer
The Morning Context is my daily opportunity to get smarter about one new company/sector. Discerning analysis, unbiased and approachable.
Miten Sampat, Angel investor & former CSO, Times Internet
In today's polarized world, authentic and unbiased facts are in short supply world over. The Morning Context is a refreshing approach towards truthful, well researched, fearless, and high-quality articles on contemporary topics.
N S Parthasarthy, Co-founder, Mindtree
As one of the early subscribers, I've had the opportunity to witness how quickly the team has grown, the variety of angles covered, and the research in every in-depth story and op-ed.
Amarjit Batra, Managing director, Spotify India
In a world full of noise, The Morning Context is the calm that stimulates and energises your mind, with stories focused on fact, truth and dogged reportage.
Nikhil Taneja, Co-founder and CEO, Yuvaa
Although it’s a paid subscription, the kind of detailed research and quality of reportage makes it worth every rupee. It’s strength surely lies in having some of the finest journalists writing for it.
Shiladitya Bora, Producer, distributor and founder at Platoon One Films
Become a TMC member
Sign up now and get free access to our starter collection.
Read our other Newsletters