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ALL IN THE FAMILY

Family feuds

/ 01:33 AM December 16, 2016

Despite ruining their reputation, family members in business often quarrel with one another.

Money is almost always the culprit:  its perceived lack, unfair distribution, or link to various entitlements.

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Take the case of US media mogul Sumner Redstone, board chair of the $40-billion National Amusements theater group founded by his father, who has majority voting rights in Viacom and CBS.

In poor health, Redstone has put up a complex trust to take over if needed, with his five grandchildren as beneficiaries set to receive proceeds more than sufficient to survive for life.

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But the prospect of extreme wealth has its allure.  Two former trust directors had already brought mental incompetence suits against Redstone, with the backing of granddaughter Keryn, who is in her 30s.

Keryn alleged that Redstone had disinherited her from his personal assets, depriving her of $6 million; and also from the group trust, of $1 billion.

Redstone and his granddaughter have reportedly mended fences, but expect the battle to be waged in full when the former passes away.

Loyalty

At the other end of the spectrum would be extreme loyalty to the business, leading to poor governance and criminal liabilities.

South Korea’s powerful chaebols, family-run empires, demand loyalty.

Take chemical giant Lotte Group, the target of government investigation for tax evasion and embezzlement, among others.

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Hours before he was to appear in court a few months ago, vice-chair Lee In Won killed himself after leaving a note stating that his boss Shin Dong Bin was a “great man”, absolving him of all charges.

Without being told, other workers on their own had started deleting online documents.

Hansung University economics professor Kim Sang Jo is quoted as telling Reuters, “Under a corporate culture where loyalty toward a boss and an organization is the most important criterion…a sound corporate governance structure cannot survive.”

Different wives

Romance becomes disastrous for heirs, particularly when founders’ relationships go sour.

When patriarch Y. F. Chang of Taiwan’s Eva Airways passed away early this year, he gave the empire to his son by his second wife.

His children by the first wife immediately moved to oust their stepbrother, and succeeded.

Manufacturing giant Formosa Plastics provides an even more sensational story.  Brothers Y. T. and Y.C. Wang founded the company, now worth more than $4 billion, and things were going fine until they each became involved with more than one partner.

In 2008, Y.C. passed away, but before leaving any will, generating a battle royale among his descendants, particularly among the children of his second and third wives.

To compound matters, when Y. T. died in 2014, his children took sides for and against their cousins, while some continue to run various divisions of the conglomerate.

But not all:  one of Y.C.’s sons, who has no management position in the company, has petitioned a court—in Bermuda—to investigate if company funds have been siphoned offshore.

If relationships falter, is all lost?  Families can take heart from Angela Leong, fourth wife of Macau casino king Stanley Ho.  Since meeting Ho 30 years ago when she worked at his casino, Leong has made a name for herself as an astute real estate tycoon in Hong Kong.

When Ho became sick in 2009, he distributed his assets among numerous heirs, and there was indeed conflict among the different branches.

But now in his 90s, Ho and his clan have survived the turmoil, and since members of the next generation are billionaires themselves, they appear to abide by the adage “live and let live.”

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