CEBU

Soriano: Family succession is a make or break event

Inside Family Business

WE WERE witness to a highly charged family drama early this year pitting two family groups belonging to the first and second generation. One group consisting of two siblings allied with the matriarch and another group comprising four siblings, collectively known as the Yanson 4 or Y4. This is the family that owns Vallacar Transit Inc., the largest subsidiary of the Yanson Group of Bus Companies. The other brands that they own are Ceres Liner and Sugbo Transit. Collectively, the group owns close to 5,000 buses, making it one of the biggest transport companies in Southeast Asia.

Defying the spirit of Christmas to love one another, the family squabble, now dubbed by media as a “Tele-Ceres,” continues to baffle everyone. As I write this article, ownership and battle for control rage. There seems to be no end in sight as cases continue to pile up with lawyers struggling to justify their engagement by defending their corporate positions. The latest drama happened a few weeks ago when two different shareholder groups conducted their own annual shareholders meeting (ASM). As of press time, the two parties continue to trade accusations questioning their respective ownership.

Last month, another family from Bacolod caught the public’s attention when the founder, Grace Lo, 81, claimed in a press conference that she was barred from entering the premises of the company she founded. Grace Pharmacy is a family-owned business that owns one of the biggest pharmaceutical retailing companies outside Luzon island. The offspring comprising two sons are now caught in a legal skirmish with their mother after she haled them to court alleging her opposition to the sale of a controlling interest to a health unit under Ayala Corp. Grace claims she was never a party to the sellout.

In an interview, the Lo matriarch felt an “indescribable bitterness with how her two sons treated her. She claimed she only learned about the company’s sale of a controlling interest from the lawyer of her children. She further claimed that it was the grand scheme of her sons to deprive her of the income, dividends and benefits that should have accrued to her during her lifetime. She added that she felt betrayed. “If only my sons approached me well about their plans, it could have changed my mind. Why is it that they never told me? As a mother, I am really in deep pain. I never thought they will do this to me. If their father was still alive, this will not happen. We struggled and faced so many challenges to make this family business big.” Inconsolable, she narrated that she only found out about the Ayala acquisition two days after she celebrated her 80th birthday. Her discovery shocked, hurt and saddened her and brought tears as she had founded and worked hard only to be sold out by her sons. Expressing her dismay, she goes on to say: “I would rather die in this world than have children who disrespect me. The most important thing in this incident is that I just want respect from them.”

Why is intra-family conflict pervasive? It is important to examine why this family infighting happened in the first place. Unplanned transitions generally are marked by problems that often prove devastating to the business, family relationships and the family wealth. The best way to avoid deadly turf battles and conflicts is to develop a governance and succession plan. Without any formal structure in place, family businesses like the Yanson and Lo families face a bleak future and a heightened risk of faltering or failing in the next generation.


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