|   Business


  |   Business


Baturina and Ambani disputes compete for the most controversial family feud

“King of Gambling” Stanley Ho had spent years preparing for his May 26th death, using all the riches and legal tools at his disposal to ensure that his assets were divided as he wished. For the flashy gaming tycoon, who enjoyed a decades-long casino monopoly in Macao, this included fighting a years-long lawsuit against two of his four wives and a number of his 17 children who he alleged had “robbed” him. Ho’s squabbles over shares with his nearest and dearest, however, are far from an unusual occurrence.

Alongside the touching stories of family firms being passed down through the generations, there are just as many television-worthy tales where mixing family and business has resulted in explosive quarrels. British tycoon Alistair McCallum Toppin, a co-founder of the AMF coffee chain, is currently facing bankruptcy over a court-ordered payment to his sister-in-law after the family descended into “dysfunctional squabbling”. South Korean businessman Shin Dong-ju has embarked on an elaborate campaign to oust his younger brother, convicted of bribing former South Korean President Park Geun-hye, from the board of the conglomerate their father founded.

Two particular disputes, however, have been particularly dramatic and long-running. One has ensnared Russia’s richest woman, Elena Baturina, pitting her against her brother and former business partner Viktor Baturin. In the case’s latest sensational development, a Russian regional court dubbed Baturina a “fugitive” after she failed to appear for a hearing in a criminal libel case accusing her of having defamed her brother’s financial manager.

Baturina is no stranger to controversy. She built her $1.2 billion fortune while her late husband, Yuri Luzhkov, served as Moscow’s mayor—"[ruling] the capital like his personal fiefdom”—from 1992 until he was sacked by the Kremlin in 2010. Critics have long alleged that Luzhkov exploited his mayoralty to give his wife lucrative city contracts which allowed her to expand her business, Inteco, from a small plastics firm to a titanic construction conglomerate, charges which the former mayor and Baturina have strenuously denied. Last September, meanwhile, Baturina was forced to resign as a trustee of a charity run by London mayor Sadiq Khan after a financial investigation into Baturina’s Be Open foundation turned up allegations of money laundering and tax crimes.

Her most contentious clash, however, has been over the 50% of Inteco her brother Viktor once owned. According to the recent testimony of Shalva Chigirinsky, a well-known Russian businessman who joined the case on Viktor’s side and one of their former business associates, the siblings started arguing over how to run the company in 2005. Particular rifts started to open up over Baturin’s stock in the firm. Baturina’s attitude towards her brother morphed into “outright hatred” after he rebuffed her demands that he transfer some of his shares to gold tycoon Suleiman Kerimov, with whom she hoped to invest in real estate. Viktor even accused his sister in a recent interview that she is responsible for the criminal case that led to his imprisonment in 2011.

To compound matters, Viktor had given half of his Inteco shares (25% of the company) to ex-wife Natalya as part of their divorce settlement. Baturina allegedly took the opportunity to up her holding in the company to 75%, by taking the shares off Natalya’s back for a paltry $500,000.

Things were already tense, but the sibling squabble exploded into an international legal brawl in both Russian and Austrian courtrooms over Baturin’s remaining 25% of the company. Baturina has suggested that her brother “donated” the last of his shares to her, and her copy of a settlement agreement the siblings signed in 2007 is missing a crucial clause which would require her to pay Viktor market value for his last 25% of Inteco—a sum which could reach $1 billion. Viktor claims that his signature on the document was forged – a claim that the Austrian court will need to verify.

If over a decade of business disputes seems to have thrown an irreversible wrench into Elena Baturina’s relationship with her brother a fresh twist might mean that another long running family feud is finally coming to a close. Mukesh Ambani, the richest man in Asia, once was inseparable from his brother Anil, finishing his sentences and expecting to run conglomerate Reliance Industries by his side.

After their father died suddenly without a will, however, this fraternal affection quickly disintegrated into rancorous enmity. The billionaire brothers’ squabbling led to the family empire being split in half: Mukesh was left with Reliance’s oil and chemical businesses, while Anil was handed the firm’s electricity and telecom arm.

Even after this unceremonious divorce, the animosity between the brothers continued to divide their family and one of India’s most important companies. Anil had been given the newer parts of the business, which at the time were expected to have more growth potential. His estranged brother, however, seemed to thwart him at every turn, allegedly pulling out of a deal to supply gas to a power plant and blocking a merger between Anil’s telecom company and South African industry giant MTN. As a result, Mukesh’s fortunes have grown while his younger brother’s have dwindled—Anil, the world’s sixth richest person in 2008, is reportedly now worth a “mere” $120 million.

Like the dispute between Baturina and her brother, the Ambanis’ family problems swiftly made their way into the courtroom. Anil sued his older brother for defamation over allegations that he had overseen an “intelligence agency” which spied on competitor firms. India’s Supreme Court was also forced to weigh in on the brothers’ long running dispute over gas prices, determining in 2010 that Mukesh’s branch of the family firm could sell gas to Anil’s companies at more than twice the price set out in a previous agreement.

Despite the decades of bad blood and courtroom battles, however, Mukesh recently sallied forth to his brother’s aid. Anil’s finances had slumped to the point that he was facing jail time for an unpaid debt to Swedish telecom firm Ericsson. Two days before the deadline, Ericsson announced that it had received payment in full, with interest—Mukesh had stepped in to pay off his brother’s debt.

The Ambanis’ feud may be winding down just as the quarrel between Elena Baturina and her brother is heating up. Both cases, though, highlight the perils of keeping business in the family.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes

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