Sona Comstar: Family firms need a governance triad

Such businesses require three interlinked layers of governance to operate in harmony

- TULSI JAYAKUMAR

When a corporate battle spills out into public view, it rarely stems from a single cause. The dispute at Sona BLW Precision Forgings (Sona Comstar)—one of India's leading auto component manufacturers—may appear, on the surface, to be about ownership rights. Yet, beneath the headlines, it is also a cautionary tale about the interlinked nature of three distinct but inseparable governance systems in family businesses: ownership, corporate and family governance.

Following the unfortunate death in June of its non-executive chairman Sunjay Kapur, Sona Comstar—partly owned by the promoter Kapur family—saw board changes that sparked an inheritance dispute. His mother, Rani Kapur, raised objections that the company rebutted before proceeding with its annual general meeting (AGM).

On paper, this is a dispute over ownership governance—who holds legal title to shares and the mechanism for transferring control. But the tremors extend well beyond. The Sona Comstar conflict reflects a breakdown of such governance. If share-transfer terms, inheritance provisions or trust deeds are ambiguous—or contested—the vacuum left invites competing interpretations, often landing in court or the press. Strong ownership governance in a family firm requires binding and well-communicated agreements, documented succession plans and legal instruments that leave no scope for ambiguity. Without this, corporate stability is left hostage to family disagreements.