The battle for succession

For decades, the wealthy Jains have worked as a family to run the Times Group, one of India’s oldest and largest media enterprises. Now, brothers Samir and Vineet Jain, the owner-managers of the Times Group, which publishes The Times of India (TOI) — one of the biggest-circulation English-language papers in the world — are looking for a way to divide their operations.

The split comes after the death in 2021 of their mother, Indu, who chaired the group until she died, aged 84. Details of the bust-up are fragmentary: the group, which also publishes the salmon-pink Economic Times and has interests in radio, TV, advertising and online media, has declined requests for interviews.

However, media analysts and people who know the Jains, most of whom did not want to be quoted, corroborated recent Indian media reports of active discussions on a split. 

In recent days, some Indian media have reported that the brothers had reached an understanding on how to divide up the group’s assets. According to these unconfirmed reports, the older brother Samir will get control of the group’s core print business, which still generates the bulk of group revenues, while Vineet will take over broadcast and radio, plus a cash payout. 

Last week, journalists at The Morning Context, a digital publication that has covered the secretive talks on the split closely, tweeted that the terms had been finalised. “Samir Jain gets print and its online titles with half of the real estate assets,” they wrote. “Vineet Jain gets broadcast and radio businesses + cashout from print.” 

However, the Financial Times was unable to confirm the reports independently, and the company itself was quick to quash reports of a breakthrough. “It is my duty to inform that employees should not go by speculation in the media about the reorganisation of the company,” wrote company secretary Kausik Nath in an internal statement to its key management, reported in India’s Exchange4media, and since confirmed as genuine by a Times Group executive. “Please be notified that social media has been speculative and incorrect.” 

The Jains’ proposed break-up has proved tricky because of the complex ownership structure of Bennett, Coleman and Co Ltd (BCCL) — as the Times Group’s flagship holding company, founded in India’s era of British rule, is officially named. The Jain brothers’ respective interests in the family business are enmeshed in a network of cross-shareholdings that now will need to be untangled.

While BCCL is unlisted, some of the entities that own it are public companies that were originally listed on the now-defunct Calcutta and Delhi stock exchanges, and they, in turn, have minority shareholders who have been pressing to be bought out at what they see as a fair price. 

Media analysts and others who know the company say the break-up has been a distraction for the group, and even impeded its operations. “All of their businesses are suffering from a lack of attention, and managers are starting to complain about it,” says Vanita Kohli-Khandekar, a media expert and author. “I have heard several complaints, and some senior people have left . . . everybody is so consumed by this partition that everyday running of the business has been impacted.” 

Everybody is so consumed by this partition, everyday running of the business has been impacted

The family tensions come at a difficult time for Indian media companies as they contend with pressures from online competitors, advertisers (many of them other family-run businesses) and Narendra Modi’s government, which is sensitive about criticism a year ahead of the next national election and keeps close tabs on what media outlets are reporting.

NDTV, India’s biggest independent broadcaster, was recently bought from its family owners, Prannoy and Radhika Roy (no relation to Logan Roy, of the family business TV drama Succession) in a hostile takeover by the Adani group. This business is owned by the billionaire Gautam Adani, who has connections to Modi, and who is making headlines of his own, after being attacked by the short seller Hindenburg Research. 

Hindenburg’s allegations that Adani’s companies manipulated the group’s share price and engaged in fraudulent accounting, which Adani has denied, have prompted a political uproar in parliament and an ongoing debate in business circles about how India’s big companies are run.

These governance questions have a wider significance for those who believe that India’s economic future partly depends on clever stewardship of family-owned businesses such as the Times Group. Arguably, family companies form the foundation, and are the defining building block, of Indian capitalism. While successful family management transitions are at least as common as messy fallouts, it is the latter that tend to make headlines and raise broader questions about the strengths and drawbacks of family control.

Indian families have played varied roles. Businesses owned by the Tatas, the Birlas and others built the Indian economy in the era of British rule. Today, family conglomerates owned by Adani and his rival Mukesh Ambani are building the country’s biggest infrastructure and energy projects and leading corporate India’s push overseas.

At the same time, these families are stirring debate over India’s high level of economic concentration and the alleged symbiosis between big business and politicians — as seen in recent attacks on Adani by Hindenburg and opposition politicians. 

These politicians include Rahul Gandhi, the country’s most prominent opposition figure who, since the release of the Hindenburg report, has questioned Modi’s past flights on Adani aircraft and Adani’s history of accompanying the prime minister on some foreign trips. Indians sometimes even use the acronym Taaj to describe the dominance of just a few dynasties (the Tatas, Ambanis, Adanis and Jindals among them).

BCCL is rated as the number one wholly Indian-owned media company in a league table compiled by Kohli-Khandekar. But four other partially or wholly foreign-owned groups — Meta, Sony-Zee, Disney Star India and Google India — all outranked it, in terms of revenue, in the 2021-22 financial year. 

The TOI was started in 1838 as the Bombay Times and Journal of Commerce, and later renamed, then absorbed into BCCL. Ramakrishna Dalmia, another Indian family capitalist, bought the business in 1946, on the cusp of independence, then sold it to Sahu Shanti Prasad Jain, his son-in-law and grandfather of Samir and Vineet. 

As the Indian republic came into its own, and electricity and literacy spread, Indians developed a resilient newspaper-reading habit that remains today. India is one of the few big print media markets in the world that is not shrinking, although growth is slowing, notably for English-language papers such as the TOI, which had a reported average daily circulation of 1.8mn in the second half of 2022.

“One of the reasons the Indian print market won’t tank soon is that we are a home delivery market, not a newsstand one, where the customer has to make an effort to buy a paper,” says Jehil Thakkar, who heads Deloitte’s media practice in India. “It’s more habit-forming this way: when you have a lot of kids at the breakfast table in the morning and someone’s reading a newspaper, they pick up the habit.” 

Samir and Vineet Jain were born a decade apart and entered the family business on the cusp of a liberalisation push that was to transform India’s economy.

Samir, who started in 1975, became BCCL’s vice-chair in 1987, the year that Vineet came aboard. Some observers in India compare Samir to News Corp’s Rupert Murdoch in having brought a hard business sensibility to the Times Group’s print business, among other moves introducing “advertorial” content and pioneering the use of advertisements that take up a paper’s entire front page (now commonplace among the TOI’s competitors, too). 

While Vineet led the group’s diversification into TV, entertainment and online business, Samir focused on print and proved a tough competitor.

At one point, an intellectual property battle was sparked with the FT when the Times Publishing House registered Financial Times as a trademark in India.

“In the 1980s, it was Samir Jain who broke with family tradition and said, ‘We are not here for a noble cause only — it’s a business’,” says Kohli-Khandekar. “And he was reviled for it.”

Samir Jain also spruced up the paper’s content with more lifestyle, sports and other lighter content — and an upbeat tone that persists today, and which tends to be favourable to the government of the day. This was in contrast to more independent titles such as the Indian Express, which has a record of exposing government mis-steps and corruption, alongside India’s more recent muckraking, digital-native outlets. 

“We keep saying the glass is half full, not half empty,” Vineet Jain told The New Yorker’s media reporter Ken Auletta in a 2012 profile of the two brothers, for which Samir declined to do an interview.

India’s big business families have, inevitably, engendered a host of service providers, from wealth managers to business consultants who advise them on making a stress-free generational transition. 

Boston Consulting Group last year published a guide to the latter process, titled Untangling Conflict, which styled itself as an “introspective guide for families in business”. Although global in its scope, the book had a strong Indian element and, as a teaching tool, posited a fictional family, the Srivastavas, and the fights that break out as founder Mahendra Srivastava’s brood branch out into new businesses. 

The book included “questions for reflection”, inviting family business owners to study their own family dynamics and draw up a “genogram” showing relatives, aides, friends and their respective ownership rights and benefits. 

“We frequently observe family businesses with complex shareholding schemes across family branches or members and tangled pyramidal structures, where multiple layers of family companies hold shares in each others’ companies,” the book observed.

We frequently observe family businesses with complex shareholding schemes

Indian companies have been evolving in how they handle management transitions, whether handing over to a new generation or bringing in outsiders. Recent changes in the law have given female heirs equal rights with males, and some prominent companies have moved in the same direction.

“A dramatic change has happened in the last decade or so,” says Sonali Pradhan, head of wealth planning at the Indian arm of Swiss bank Julius Baer. “Earlier, the ownership would predominantly be given to a male child, but in the past decade; we have seen that many family owners treat the son and daughter at par.”

In perhaps India’s most closely watched — and ongoing — family business transition, Mukesh Ambani, 66, last year stepped down as director of telecoms company Reliance Jio and elevated his eldest son, Akash in his place. Akash’s twin sister, Isha, runs Ambani’s retail business, and youngest son Anant, 28, is a leader of the group’s renewable energy business. The family transition so far appears to have been smoother than patriarch Mukesh’s own experience feuding with his brother, Anil, after their own father Dhirubhai’s unexpected death in 2002. 

Indeed, while Indian business media have seized on reports of family disputes at the Times Group and Bharat Forge, the industrial group, some untanglings of family assets have gone more amicably, including one at Mumbai conglomerate Godrej which is currently under way. 

Other families, meanwhile, have gone the route of handing over the keys to outsiders: Hero MotoCorp, the world’s biggest maker of motorcycles and scooters, recently appointed non-family member Niranjan Gupta as its new CEO. Gupta replaces family patriarch Pawan Munjal, 69, although Munjal will stay on as executive chair and a full-time board director. 

Some of the bumpiest transitions, say analysts, come soon after the death of a family head. “It’s great as long as the patriarch is alive and around,” says Deloitte’s Thakkar. “Most don’t give the children the business while they’re alive, although they do give them operational control.” He adds: “It’s only when the old man dies that some of the fights start to break out.”

It’s great as long as the patriarch is around. It’s only when the old man dies that fights break out

As the Jains move ahead with dividing up their family business, they have a task on their hands. According to The Morning Context, the reported agreement between the two brothers was brokered after the Times Group owners appointed two people to conduct a “mediated auction” that would allow for the split: Sunil Bharti Mittal and an unnamed member of the Dalmia family, which owned the Times of India before the Jains. The Dalmia group declined to comment, and Mittal’s Bharti Enterprises did not respond to requests for comment. 

However, even with mediators presiding over the process, dividing the spoils has probably not been simple. BCCL’s shareholders include some minority investors who have been seeking litigation in pursuit of a better price during the long-mooted shareholder buyback plan. While BCCL itself is unlisted, the litigants have pressed their case in complaints to the Securities and Exchange Board of India, the regulator, on the grounds that some of the 11 companies and individuals listed as its shareholders as of end-March 2022 — including a few with significant stakes — are public concerns. 

One of the minorities pursuing legal action told the FT he was “taking legal opinions” after reading reports that the brothers had reached an understanding on the outlines of the split. “I don’t think it’s possible without restructuring the crossholdings,” said the shareholder, who asked not to be named. “Without doing a valuation, I don’t see how they can do it.”

Other Indian family companies have gone through similar, complex untanglings of shareholder interests that took time, but often — eventually — ended in success. This one, say observers, is a challenge of its own order, and has tested some of India’s sharpest business and legal minds.

This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment