In Family Feud-business style, members of one family do not belong to one team but to several teams. Sibling rivalry, emotional tension, jealousy, big bucks and power struggles are the categories.
That’s how it is in many Filipino family businesses: Falcon Crest and Dynasty are played out every day, carried out through generations if issues are not resolved. In Western societies, family feuds grab newspaper and tabloid headlines, such as the conflict within the Gucci family, the recent legal battle between Playboy Playmate Anna Nicole Smith and the children of her late oil billionaire husband J.H. Marshall II.
To prevent the inevitable confusion and family feud among his children, one of the top three wealthiest billionaires in the Philippines recently told the Philippine STAR that he has already assigned 50 percent of his wealth to be inherited by his eldest son, according to Asian patriarchal tradition, because he strongly believed that a family should have only one undisputed leader and that the elder generation should make way for a clean succession.
In the Philippines, among the famous family feuds include that of the Cojuangco clan, with the Cory Cojuangco-Aquino side versus the branch of first cousin Danding Cojuangco (a feud which crossed over to the level of national politics); the Zobel-Ayala split between first cousins Jaime Zobel de Ayala and Enrique Zobel; the disagreements among the third-generation Soriano siblings of Anscor; the recent and much-publicized Ilusorio family feud involving warring spouses with three children on each side; the Uytengsu-Young conflict between brothers-in-law in General Milling and Alaska Milk; and the feud between the late Senate President Gil Puyat Sr. and his sister, which caused a split in the Puyat business empire, among many others.
How can family feuds in business be prevented by the founders or clan elders? What are the measures to resolve conflicts without resorting to expensive lawyers and court cases? Is publicly-listing family corporations and institutionalizing professional management a guarantee against family feuds? Whether in the West or Asia, family feuds are a recurring and persistent problem in clans since ancient times. The award-winning film of great Japanese director Akira Kurosawa entitled Ran (from the Chinese character meaning "chaos") depicts the tragic story of a bitter family feud involving an aging feudal lord and his quarreling sons.
Abundance of talent, high education and business success have not prevented the seemingly irreconcilable family feud of the children of Ramon Siy Lai. The sudden and unexpected death of the patriarch didn’t give them time to institutionalize an orderly and clearly-defined succession. George studied college in the Ateneo and earned his master’s degree at Wharton School of Finance in the University of Pennsylvania, while rival sister Bernadine also studied in the Ateneo and earned her master’s in Business Administration from the Kellogg School of Northwestern University.
On September 3, Rosalina Siy, the widow of Ramon Siy Lai, wrote a letter to her children informing them that she and her two sisters-in-law, Emma and Luz, had signed an irrevocable voters’ trust agreement (VTA) in favor of Bernadine valid for five years. It was a shocking move and possibly worsened the conflict within the family and made personal enmity irreparable. In the past, various mediators reportedly attempted to resolve the family disagreements, such as former Central Bank Governor Jaime Laya, SGV Group chairman Cesar Purisima and southern Philippines retail tycoon James Gaisano. Up to this time, well-meaning friends on both sides of the family are still trying to mediate an amicable settlement to solve this problem.
To seek a real lasting solution and freedom for all, we suggest that both sides of the Ramon Siy Lay family should allow separation of the diverse family enterprises, even if the division of assets may not be equal. One interesting case that can be emulated was the separation between former business partners Lim Se Keng and Yu Chi Hua, self-made entrepreneurs who used to co-own Keng Hua Paper which was a corporate name derived from the last syllables of their names. The question of who will get which company was said to have been decided with the toss of a coin or a dice, with Lim gaining control of Aclem Paper Mills while Yu got Keng Hua/Globe Paper.
The question is: Is there life for family members who feel aggrieved and maneuvered out of the management control of the family business?
Without siding with any faction, the 51-year-old top banker Dionisio Ong recounted the story that his businessman friend Robert Kuan had once told him. The family that owned the famous Ling Nam Noodle Restaurant and noodle factory in downtown Manila was once wracked by a family feud, resulting in Robert Kuan losing power and getting out of the business. Kuan said that instead of wasting his youth fighting it out with his perceived oppressors in the family, he struck out on his own and established what later became the larger and more successful Chowking fastfood chain.
Another family feud almost similar to the Ling Nam/Chowking case involves family members behind such insurance giants as Prudential Guarantee, First Life, Pioneer Insurance and Seaboard-Eastern Insurance. When Pioneer Insurance patriarch Chan Toh died, control passed on to his youngest brother Robert Coyiuto Sr. Unfortunately, Coyiuto was later reportedly eased out of management by his other brothers. The elder Coyiuto struck out on his own with his sons, establishing Prudential Guarantee and Assurance, Inc. Today, Prudential Guarantee is the country’s preeminent non-life insurance giant led by stock market kingpin Robert Coyiuto Jr., while fourth son Peter Coyiuto is steadily building up his own First Guarantee Life Assurance Co., Inc. (First Life) as a respected leader in the life insurance industry. The 47-year-old Peter Coyiuto is past president of the Wharton-University of Pennsylvania Alumni Association, and his First Life is allied with world’s second biggest life insurer Dai-Ichi Mutual Life of Japan and Swiss Life of Europe. Their cousins are still doing well with Pioneer Insurance, but another cousin from that firm went on his own and now controls another top insurer, Seaboard-Eastern.
The country’s foremost Hispanic business clan, the Zobel-Ayala family, had its own bitter family feud. In the early 1980s, then Ayala conglomerate head honcho Enrique Zobel clashed with his cousin, San Miguel Corporation boss Andres Soriano Jr., and he angrily sold the Ayala group’s controlling shares to Marcos ally Eduardo "Danding" Cojuangco Jr. His displeased aunt, Mercedes Zobel McMicking, stripped him of managerial control over the Ayala empire in 1983 and handed it over to his first cousin, Jaime Zobel de Ayala, whose two sons now run this empire. Enrique eventually divested his shares in Ayala Group and struck out on his own with the empire’s overseas enterprises.
In the early 1990s, after Enrique became paralyzed from the neck down when he fell off his horse in the family’s Sotogrande resort in Spain, he returned to the Philippines and reportedly received a visit from estranged cousin Jaime and his whole family at the Makati Medical Center. This was said to be the first ever meeting between the cousins for some years.
Is blood indeed thicker than water in the long run? Can warring relatives eventually lower their pride, adjust to each other’s shortcomings and realize that there is more strength in unity than in endless rivalry? Or is the parting of ways and independent thinking of the succeeding generations an inevitable realty that should encourage family elders to lay the groundwork for smooth separations and the provision of escape routes for dissenting kin such as publicly-listing the corporation?