Karan Johar’s Dharma Productions entered into a partnership with Adar Poonawalla a little under a year ago. This investment from the billionaire allowed Karan to expand Dharma’s scope with cash inflow, even as he gave a sizable chunk of his production house.
But Adar wasn’t the only billionaire looking to acquire Dharma Productions. Sanjiv Goenka has revealed that his group almost bagged the deal with Dharma only for Karan to be ‘spooked’ by a few legal clauses.
Sanjiv Goenka on the Dharma deal
Sanjiv Goenka heads the RP-Sanjiv Goenka Group (RPSG Group), a $10-billion conglomerate headquartered in Kolkata that has interests in various fields, from entertainment and media to sports and energy. Sanjiv Goenka recently revealed that his and Karan’s deal for Dharma almost went through sometime back. Speaking on a podcast with Parthiv Neotia, he revealed, “Karan is a very dear friend, he continues to be. I think our lawyer and legal team put a drag and tag clause, and it spooked him. I wasn’t aware these clauses were there, and that it spooked him. If I had known, I would have removed them. That was the reason the deal eventually didn’t happen.”
Goenka was asked if he regretted not being able to complete the deal, and the businessman responded: “I am disappointed that I didn’t get the Dharma deal. Sometimes it is also a lesson in how much to delegate and at what time to delegate. Too much delegation doesn’t necessarily work. This is one example.”
What is a drag and tag cause?
In mergers and acquisitions, drag-along and tag-along causes, often called drag and tag, exist to protect shareholders’ rights. The drag-along clause allows majority shareholders to force minority shareholders to sell their shares if a buyer wants to acquire the company. Similarly, the tag-along clause gives minority shareholders the right to join a sale if majority shareholders are selling their stake. These are standard clauses in most M&A agreements.
In the world of entertainment, this comes up often in production houses, talent agencies, and startup-backed content companies where founders and investors hold different share percentages.
About Dharma Productions
Dharma Productions was founded by Karan’s father, Yash Johar, in 1976. Under its banner, the father-son produced films such as Dostana, Agneepath, Kuch Kuch Hota Hai, Kabhi Khushi Kabhie Gham, Kal Ho Naa Ho, Raazi, and many more. Adar Poonawalla acquired a 50% stake in the company in 2025 for ₹1000 crore.