The Birla Family Crisis
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Case Details:
Case Code : BSTA034
Case Length : 23 Pages
Period : 2004
Organization : Birla Group
Pub Date : 2004
Teaching Note :Not Available
Countries : India
Industry : Diversified
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction
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Rarely had real stories read more real than reel stories. The Birla vs Lodha battle that raised questions about corporate and family governance is one such. A rich, childless widow with a vast fortune had died leaving a will gifting her entire property to a faithful companion. Her cousins, nephews and grand nieces were outraged. High-powered lawyers were pressed into service as both sides geared up for a long battle.
Priyamvada Birla died in Calcutta on July 3, 2004. On July 12 her advocate and close associate R.S Lodha came to Birla Park and read out the will, according to which all her assets went to him after her death.
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The Birlas were taken aback as the late M.P. Birla, Priyamvada's husband, had often expressed his desire to bequeath his assets to charity. Sources close to Birla family maintained that, even a month ago, Priyamvada had spoken of her intention of leaving her estate to charity, in line with M.P. Birla's wishes.
For the next few days, the air was thick with speculation.
"Perhaps her mind was poisoned against her relatives," a source said. Others pointed out that Priyamvada felt alienated from the rest of the clan. The Birlas vehemently denied this charge. "The Sunday ritual apart, the entire family meets regularly for festivals and other special occasions," said a family source. "Besides, everyone talks to everyone else on phone several times over the week."1
Different versions of the will, each claiming to be authentic, started floating
around...
Excerpts >>
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