Wealth can destroy your family
ALL business owners, meaning anyone who owns anything of value that will be passed on to the next generation, have the potential to destroy their families through poorly planned and unclear succession and wealth transition.
And it is never enough to seal family harmony when you require your children to regularly troop to your home every Sunday for lunch or dinner together with their spouses, regale you with their stories, while you playfully amuse yourself listening to your grandchildren’s out of tune song and dance number.
Despite all this founder-initiated gatherings meant to instill sibling unity, no family is immune to the dangers that wealth can generate. As a family governance advisor doing the rounds in Asia, I still get a front row seat when offspring relationships erupt into a bitter fight after the death of their parents with the added benefit of lawyers fanning the flames in disputes over poorly and hastily crafted succession arrangements left by the parents.
I want to share the unfortunate story of the Chadha brothers of India. An incident happened sometime in November 2012 pitting two brothers who were embroiled in a bitter property dispute after their father, Kulwant Chadha, died without clarifying ownership and succession issues among the children.
Accompanied by their bodyguards, liquor baron, property magnate and eldest son Ponty, was seen arguing with younger brother Hardeep over their inheritance. Both were obsessed about a particular farmhouse that their father had left to Hardeep.
Ponty had contributed hugely to the family business and believed he deserved the property. Hardeep felt that he had not only been bequeathed the farmhouse by his father, but that the overall deal on his father’s estate was unfairly distributed, giving him less than what he believed was his rightful share.
A source said that Hardeep had phoned a media friend earlier that morning and told him that “he was going to finally settle the dispute with Ponty today.” Cops claimed that both sides had “planned in advance to settle scores.” The confrontation ended with Ponty dying in a hail of bullets at the hands of his own brother Hardeep. This led to an exchange of gunfire between the two sides, with Hardeep subsequently killed by one of Ponty’s police escorts.
For a family reported to have assets worth more than $10 billion, it would be hard to imagine that Ponty and Hardeep’s father had ever dreamed that his sons would die in a gun battle over an irrelevant asset one day. Beyond the subject asset in dispute, the conflict emanated from unclear distribution of ownership, poorly crafted transfer of power, sibling rivalry, past hurts, betrayal and perceived unfair inheritance. It was apparent that the father failed to address the brewing issues of the children that led to the bloody conflict.
The Chadha brothers’ senseless death could have been avoided if the father prepared a thorough succession and wealth transition plan covering three to five years earlier. There is no doubt that families of the warring Chadha branches and the relationships in the succeeding generations have been shattered.
Like most founders, owners have the tendency to focus more on wealth generation over preservation and set aside subdued emotional issues of family members. This apathetic mindset by the father exacerbated the already volatile relationship among the Chadha siblings and his death effectively ignited the flames. Ominously, it was a disaster waiting to happen.
As one relative said, “Is it God’s will? Both brothers had an amazing life but suddenly everything fell like a house of cards.”