In India’s listed companies, promoter legacy and corporate governance must co-exist, but within a clearly drawn Lakshman Rekha. Trust in capital markets depends on adherence to governance norms, transparency and ethical conduct. Promoter families have shaped many of India’s biggest businesses.
When a promoter family name and credibility combines with performance, companies thrive. When they don’t, as seen in cases during the past two decades involving some of India’s listed companies; business performance, investor trust and boardroom stability may suffer.
At the same time, separating ownership from management has been the making of corporate giants ranging from banks like ICICI and HDFC Bank, to companies such as L&T, Infosys, Tech Mahindra, Mind Tree and ITC.
Professionally run firms consistently reward shareholders by insulating business decisions from personal disputes. A promoter’s legacy is not a licence to micromanage. The law recognises listed companies as independent legal entities, where accountability, transparency and responsibility, not lineage, govern decisions.
Battles between promoters and boards erode shareholder value, weaken management and damage assets. The absence of formal succession planning and reluctance to separate ownership from control remain among the biggest governance risks in Indian business. A few examples of listed companies being subject to promoter-related disputes include Yes Bank (the 2015 dispute on nominating board members), Sun TV, Western Carriers India, Godfrey Phillips and many such listed entities in the past.
What Went Wrong
Sona Comstar, an auto-components manufacturer with promoters holding 28.02% via Aureus Investment, has long been a listed company overseen by its board. Following the sudden death of non-executive chairman Sunjay Kapur in June 2025, independent director Jeffrey Mark Overly was appointed chairman, and Sunjay’s wife, Priya Sachdev Kapur, joined as a non-executive director.
Subsequently, Sunjay’s mother, Rani Kapur, stated that she had rights to a majority stake under her late husband’s will and raised concerns about exclusion, pressure and lack of transparency. She requested that the annual general meeting (AGM) be postponed. The company responded that she had not held shares since 2017 and had ceased to be a director in 2019, and that all decisions had been taken in compliance with applicable laws and shareholder approvals. The AGM was held as planned, with no change to the board’s composition.
The episode reflects broader issues in corporate governance, where personal or family claims may come into conflict with established legal structures.
In the past 200 years or so, landmark court rulings in various common law jurisdictions, including the Salomon vs Salomon case, have settled that a company is a separate entity from its promoters. Once listed, control shifts from family hierarchy to corporate law, the shareholders are the owners, the board the highest decision-making body. Promoters may still nominate directors proportional to their stake, vote at AGMs and offer strategic inputs, but they cannot bypass the board or impose personal claims.
The Cost of Blurred Lines
The Sona Comstar dispute shows the cost when these lines blur: uncertainty, reputational harm and governance disruption. Indian jurisprudence has consistently barred shareholders from interfering in day-to-day management unless expressly authorised by company articles or agreements. Even directors’ duties are owed to the company.
The real fault line here is one that runs through much of corporate India: succession planning is often left unresolved. When arrangements for wills, trusts, and inheritance are delayed, uncertainty can follow a founder’s death. Robust companies institutionalise succession through family charters, shareholder agreements or trust structures.
The Securities and Exchange Board of India’s 2023 mandate to disclose family arrangements has not yet translated into meaningful transparency. Boards must act as active guardians of shareholder value, not passive observers. In promoter disputes, they must insulate management from family politics, prevent misuse of company funds for personal battles and empower independent chief executives to make merit- and strategy-based decisions.
Sona Comstar is more than a family tussle, it’s a warning. Such disputes don’t just hurt reputations; they spook investors and signal reluctance to embrace modern governance. For India’s capital markets to remain credible, the Lakshman Rekha between legacy and law must be enforced, every time, without exception.
(The views expressed in this article are personal and do not represent the opinions or positions of Outlook Business.)
