Feud over family company is better avoided through careful planning

Saturday January 16, 2010
Feud over Syed Kechik’s millions goes to High Court
By NURBAITI HAMDAN


KUALA LUMPUR: The children of the late Tan Sri Syed Kechik Syed Mohamed Al-Bukhary have gone to court to fight over the RM400mil estate he left behind.

The High Court granted an injunction applied by his two daughters – Sharifah Zarah and Sharifah Munira – to prevent their half-brother Syed Gamal from interfering in Syed Kechik Holdings Sdn Bhd’s affairs yesterday.

Syed Gamal, 45, who is Syed Kechik’s only son from his first marriage, is not allowed to intervene in the administration, enter the premises and access the records and accounts of the company.

He is also barred from interfering in the duties of the company directors.

The sisters, who are directors of the company, were not present but were represented by laywer Datuk Vijay Kumar.

This is the second injunction granted by a court in the family saga that started after Syed Kechik’s death last year.

Syed Gamal had obtained an ex-parte injunction at the Syariah Court on Sept 14 to stop his 44% stake in the company from being sold or liquidated.

Justice K. Anantham, who presided over the High Court case in his chambers at the Jalan Duta court complex here, ruled that the Syariah Court had no jurisdiction over the company because it is a corporate entity.

Syed Gamal, who was with his cousin Syed Azman Syed Mansor Al-Bukhary, said his lawyers would appeal against the decision.

“I will continue with my struggle to pursue my rights according to Faraid law. My rights have been denied almost all my life. This is not a struggle for myself but also for my family,” he said when met outside the courtroom.

Syed Gamal was represented by his three lawyers – Atan Mustaffa Yussof Ahmad, Az-mi Tan Sri Dr Mohd Rais and Zulkifli B.C. Yong. Syed Kechik died at the age of 81 on April 10 last year.

His son-in-law is Al-Bukhary Foundation chairman Tan Sri Syed Mokhtar Al-Bukhary.

http://thestar.com.my/news/story.asp?file=/2010/1/16/nation/5483928&sec=nation

Succession conspiracy in family company

Does your business look like this?

Ivan Landsberg, a Yale University expert in family businesses, coined the term succession conspiracy - how business owners, their spouses, their family members, and non-family co-workers either consciously or unconsciously make damaging decisions that foil the effective succession of the busines to the next generation.

He described three general types of family business management structures back in the 1980s:

Controlling owner:  A single owner is involved in every aspect of the business and makes critical decisions.  Typically little or no planning occurs for this owner's departure.

Sibling partnership:  Siblings may share leadership, or a lead sibling may be designated - or designated by default - to make most of the business's key decisions.

Cousin consortium:  This structure is common among some of the biggest family fortunes in the world.  When the business has been passed on to the children of prior sibling owners, eventually several branches of the family share ownership, and coalitions may be formed to create blocks of stock that represent more voting power.

Aligning with any of these ownership structures doesn't mean your family company is necessary sliding off the rails.  But if you recognise yourself in any of these structures, ask yourself whether the following also applies:

• The owner has created a succession plan that not only sets benchmarks for who the next generation leadership will be but also comes with full buy-in from all family memebrs, young and old, with a stake in the business.
• The owner and top family officers have spoken with family members recently either separately or in a group about their feelings about the business and whether any conflicts or issues need to be worked out.  Better yet, is there a formal meeting structure?
• The owner has helped craft - with experienced legal and tax professionals - a quality transition plan that allows her the money and freedom to work in the family business if she's asked or to comfortably start retirement or a new phase of her career.