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Sunday, Jun 30, 2002

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Keeping family businesses ticking

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PUNE, June 29

REPRESENTATIVES of various family-owned businesses in Pune city have come together to form the Family Business Forum, an organisation that seeks to help successors of old business families carry on the trade without any hiccups. And no, this has nothing to do with reports of Hamara Rahul Bajaj and his family dispute.

In fact, family disputes and differences are routine Kahani Ghar Ghar Ki, according to the group's founding members led by Ajay Mehta, Director, Deepak Fertilisers and Petrochemicals.

The forum promises to provide the platform for successor generations to air their thoughts on various issues that crop up - such as diluting stake, raising capital, making way for professional management and the resultant fear of losing control, among other things. And while it does not aim to provide solutions to individual problems, it promises to help the new generation by calling in experts for talks and discussions on various issues concerning family businesses, both in India and around the world.

Membership into the club, which has the likes of Thermax's Meher Pudumjee, Forbes Marshall group's Naushad Forbes and a clutch of other old Pune families, seems tough: aspirants need to be professionally qualified, have five years' experience in the business and foreign exposure, "since this is only a forum for like- minded people".

And while the guest speaker for the inaugural session, Sunil Lalbhai, could not attend the session due to torrential rains, it fell upon another Pune patriarch businessman, Abhay Firodia, CMD, Bajaj Tempo, to do the honours. "As business becomes more and more competitive, the pressure will make it imperative for businesses to become more efficient and this is possible only with the induction of professional management," he said.

And, perhaps in a telling comment on the number of family-run businesses that are splitting to make way for individuals forming it, he said, "The two most important factors that keep a family business together are total transparency and the willingness to allow individual members to grow and develop their aspirations. Families that don't allow individual members to develop are confronted with members who want to break out on their own."

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