The case of the family feud

Facts

In 1919, Ratansi Dharamsi Morarji, who passed away in 1959, incorporated ‘Dharamsi Morarji Chemical Co. Ltd. (DMCC)’ which gained the blue-chip status in the 1970s. In 1970 Ratansi’s younger son Dhairyasinh, who was one of the main architects of DMCC, passed away. Now Pratapsinh, the elder son of Ratansi, had to face more responsibility than he could handle. So he appointed D. B. Kotian as the first non-family executive director of DMCC in 1971. Pratapsinh passed away in 1978. So Avantika, Chandravati D. Morarji and Urvashi invited R. M. Goculdas to join DMCC as the chairman. Under Goculdas’s management the company’s performance kept declining. In 1979 Goculdas removed Kotian from the post of the executive director and on 22nd June he removed Chandravati from the Board of Directors.

Problems

The problem rose by the Morarji family and its members is that, under the management of Goculdas, the performance of DMCC has constantly declined and they also charge him that he has been dealing with Tolve-Chem Pvt. Ltd. which has been consistently making losses. They also accuse the Managing director, J. L. Thakkar, to have undisclosed deal of routing large orders for capital equipment though Nirada Techno Caste Pvt. Ltd. in which Thakkar’s wife was a major shareholder. All the reasons being personal were against the performance of the company and the company which used to be considered as a safe investment was no longer the same.

Solution

Considering the current situation, the chairman Goculdas should appoint an experienced candidate to the post of the chairman. The financial figures show that since Goculdas was appointed as the chairman of DMCC, its performance has declined. He should give up the post so as to improve the performance of DMCC. This would not only be profitable to the company but also to its shareholders and further it will also help DMCC to regain its position as a blue-chip company once again.