Abstract

Biological E. Limited was a Hyderabad, India–based pharmaceutical company. The founder, J.A Narsimha Raju (Raju), along with his business partner, Venkata Krishnam Raju Datla, grew the business worldwide through numerous associations. The business partnership between them turned into a personal relationship with the marriage of Renuka, daughter of Raju, and V.K Datla (Datla), son of Venkata Krishnam Raju Datla. After the death of Raju, Datla took on the responsibility of BEL and continued to run it as Managing Director and Chairman till his death in March 2013. His death set off a feud between his wife Renuka and their three daughters, Mahima, Purnima, and Indira for the control of the company. Till March 2013, Datla, Renuka, and G.V. Rao (Rao) were the Directors of the company. After the demise of Datla, only Renuka and G.V Rao were left on the Board. Rao offered his resignation soon after the demise of Datla, but within a day he took back his letter and convened a board meeting in which he inducted the three daughters of Datla into the board. At one of the meetings he held, Rao transferred the 81% shares held by Datla to Mahima who was then appointed unanimously as the Managing Director of BEL. Renuka, however, considered the meetings illegal and could not accept the entire control of the company in her daughters’ hand. She first approached the Company Law Board and then the City Civil Court of Hyderabad.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• To understand the reasons for conflicts that can hinder the efficient functioning of a family business.
• To learn about the Succession Planning Model so as to run a family business effectively for the longest period of time.

Keywords

Family business management,Family feud, Conflict,Resolving conflicts among family members,Three Circle Model of the Family Business System,Succession Planning,Succession Planning Model,Family council,Organizational Behavior,Business Law