How the wealthiest men in Asia plan for the future

“They want to avoid that,” Boes said. “In addition, because of the pandemic, people are starting to think about what they really want.”

Client inquiries regarding family inheritance and governance issues in the Asia-Pacific region have doubled since before the COVID-19 onslaught, he said.

“Culturally, it’s not easy for people to talk to,” Boes said. “The younger generation doesn’t want to grow it. Now people are preparing and preparing.”

Ambani has not announced plans to move away from his responsibilities as Chairman and Managing Director of Reliance, but his children are becoming more prominent. To shareholders in June of this year, Ambani first showed his descendants, Akash, Isha (30) and Anant (26), to play an important role in the reliance.

“There is no doubt that the next generation leader of the Reliance, led by Isha, Akash and Anant, will further enrich this precious heritage,” he said. After the death of founder Sam Walton in 1992, the mogul is attracted to the way the family behind Wal-Mart managed the transfer of control, people familiar with his ideas say. rice field.

Wealthy dynasties, such as the heirs of the Hermès fashion empire of the Dumas family and the consumer goods giants SC Johnson & Sun Johnson, have sought to help relatives manage their day-to-day business. But the renowned Walton, the world’s wealthiest family, only maintains board-level oversight and is a US retail giant since 1988, when David Glass took over the role of CEO from Sam Walton. Outsources the operation of the company to the manager.

The Walton Empire, created by Sam Walton, was in 2001 with his son Rob, wife Helen, and son John

Sam’s eldest son Rob Walton and his nephew Stuart Walton sit on Wal-Mart’s board of directors, and Sam’s grandson-in-law, Gregory Penner, was in 2015 at the Arkansas-based company Bentonville. I became the chairman. Clan is higher than other shareholders, and most large families focus their energy outside Wal-Mart, on other businesses, or in areas such as sustainable investment and philanthropy.

The Walton family model reflects the extraordinary predictions of founder Sam, who has now built a global giant from a handful of “nickel” stores. He began preparing for his successor in 1953, almost 40 years before his death, by transferring 80% of his family business to his four children, Alice, Rob, Jim and John. This minimized inheritance taxes and helped families stay in control as the company grew into the world’s largest retailer.

According to data compiled by Bloomberg, Wal-Mart currently owns approximately 47 percent of Wal-Mart through Walton Enterprise and other family-owned trusts. “That means they keep shaking,” he said.Retail Revolution: How Wal-Mart Created a Brave New Business World“The director of the Center for Labor, Labor and Democracy Studies at the University of California, Santa Barbara.

“The fact that the family owns nearly 50% of the company means that the managers they hire know where the real power lies,” Lichtenstein said.

Wal-Mart disagreed with Liechtenstein’s interpretation, stating that retailers have promised to maintain a majority of independent boards. A Wal-Mart spokeswoman said, “We believe this independence will ensure strong oversight and an independent perspective and promote the overall effectiveness of the board.”

“What Ambani does is very rare. Usually these patriarchs keep it all until the very end. He gets smarter because he learned from the family’s past mistakes that they didn’t want to repeat. rice field.”

Winnie Chien Penn, Director of the Tanoto Asian Family Business and Entrepreneurship Research Center at Hong Kong University of Science and Technology.

The family-centric model of delegating management is clearly appealing given Ambani’s history.

Founded as a trading house by Mukesh’s father, Diradiral Hirachand Ambani, in 1973, the Reliance Empire fell into uncertainty when the patriarch, widely known as Dilbai, died unintentionally in 2002.It scattered sparks Years of battle for control Between Mukesh, who was involved in business at the time, and his younger brother Anil (62 years old).

Initially, the brothers were the most important company in India with plans to work with Mukesh as Chairman of the Reliance and Vice Chairman of Anil, and then expand beyond what has already become an energy niche. However, the relationship was tense and they believed that each other was making a decision without sufficient consultation. Mukesh was frustrated when Anil once announced without discussing a power generation project. Meanwhile, Anil was furious when his brother rebuilt the entity that manages the family’s reliance stock. His input.

Anil Ambani began working in the family business after his father died, but in recent years he had fallen with the Mukesh brothers before reconciliation.

Anil Ambani began working in the family business after his father died, but in recent years he had fallen with the Mukesh brothers before

At one point, Anil refused to approve the Reliance’s financial statements and stated that the disclosure was inadequate, so directors of the subsidiary he owned resigned to show their loyalty. bottom.

Underlying this was a controversy over the basic nature of sibling relationships. As an elder, Mukesh considered himself a natural boss, and Anil considered himself an equal partner. The battle eventually snowballed into a sort of Ambani civil war, forcing his mother, Kokiraben, to intervene three years after Dilbai’s death.

In a 2005 settlement mediated by Kokiraben, the brothers split Reliance’s assets. While Anil undertook the telecommunications, wealth management, entertainment, and power generation businesses, Mukesh maintained control of the refining, petrochemical, oil and gas, and textile businesses.

This is a “typical example of poor succession management,” said Kabyle Ramachandran, head of the Thomas Schmidheiny Family Enterprise Center at the Indian School of Business. “After a bitter process with my brother, Mukesh Ambani definitely doesn’t want to recreate the play at his family branch.”

Ambani’s heirs will inherit an empire that is very different from the empire that his father inherited as part of his family’s detent.

In his 20 years in power, Ambani transformed the reliance. The diversification of the conglomerate, the owner of the world’s largest oil refinery complex, has gone too far in the last five years, overturning India’s mobile communications outlook and bringing Inc. and Walmart to India’s up-and-coming electronic retail space. I took over. Since 2016, the market value of Reliance has more than quadrupled, making it the most valuable company in India.

This year, the focus was on building the group’s green energy side, a strategic shift for one of the world’s largest fossil fuel billionaires. The traditional energy industry faces climate change concerns and concerns for investors, and seems to be another promising play by Ambani, who became his grandfather in December. Ambani recently abandoned its two-year-old plan to sell 20% of his oil and chemical stake to a Saudi Arabian oil company. This is a sign of a change in his priorities. One of those familiar with Ambani’s plans said he was also restructuring his business to strengthen family control. According to company filings, the clan’s stake in the listed reliance sector has risen from 47.27 percent in March 2019 to 50.6 percent.

People said the Reliance could become a holding company for the three underlying businesses of energy, retail and digital, which are likely to be listed separately in the future. According to some, children and Nita own equal shares in a holding company, giving listed companies the same level of upset.

Such settings may prevent control uncertainties that can lead to combat. And families are likely to have more say in performing reliance than Wal-Ton does in Wal-Mart, some said.

“In Indian companies, the controlling shareholder has considerable voting rights that can be used to appoint or dismiss members of the board,” said VK Unni, a professor at the Indian Institute of Management in Calcutta.

As he seeks to establish a transformation in reliance, the way Ambani manages the takeover of operational and strategic directions is carefully watched, not just in India.

According to Credit Suisse, more than one-third of Asian family empires are owned by first-generation founders, and over the next decade, nearly 100 of these companies will seek to transfer control and wealth. is. I have been exposed to the Western business model. The big names who have already taken over the reins have taken a variety of routes, from traditional-Hong Kong’s Lee and Chung’s family took over control to their eldest son-to lesser. Philippine billionaire Henry Sy leads a family council that oversees the largest listed companies in Southeast Asia by market value, from real estate to banks.


Hong Kong billionaire Lee Man Tat broke priority when he formed a family council to let his wife and her five children speak about the Lee Kum Kee Empire, which has a history of more than 100 years spanning real estate seasonings. I did. Lee Seung-yuop died in July and had his children run a conglomerate with a family constitution.

It is clear that Ambani’s children have already been prominently groomed. The twins played a vital role in the company’s transition to retail and technology, including negotiations with Facebook (now Meta Platforms). As a result, social media giants have secured a $ 5.7 billion investment in Ambani’s e-commerce ship, Reliance’s Jio Platforms. ambition. Anant is Director of Renewable Energy Division of Jio Platforms, Petroleum and Chemicals Business, and Reliance.

“It’s very rare for Ambani to do,” said Penn of the Tanoto Center in Hong Kong, citing his positive plans. “Usually these patriarchs keep it all until the very end. He got smarter because he learned from the family’s past mistakes that they didn’t want to repeat.”


How the wealthiest men in Asia plan for the future

Source link How the wealthiest men in Asia plan for the future

Related Articles

Back to top button