The development comes after the shareholders of Ambadi Investments, the holding company of the Rs 38,100-crore Murugappa Group, voted against the induction of 59-year-old Valli Arunachalam, the eldest daughter of former executive chairman M V Murugappan, into its board.
Valli Arunachalam has issued a legal notice to the Murugappa family members, Murugappa Group's holding company Ambadi Investments Ltd. (AIL) management and others.
The development comes after the shareholders of AIL, the holding company (holdco) of the Rs 38,100-crore Murugappa Group, voted against the induction of 59-year-old Valli Arunachalam, the eldest daughter of former executive chairman M V Murugappan, into its board.
Arunachalam said "we have decided to seek legal remedies with respect to our ongoing efforts to settle my father’s will.
Accordingly, we issued legal notices to the Murugappa family members, Ambadi Investments Ltd. management, the Company and other people in relation thereto".
"It was a big step for us and a very unfortunate one, as we have worked tirelessly over the course of the last three years to bring about an amicable settlement of my father’s interests in AIL.
"With the family voting unanimously to reject my appointment to the AIL board, we have seemingly reached the end of the road for an amicable settlement," said Arunachalam.
She claimed her family tried for an amicable settlement and tried inter alia, a proposal for the engagement of an independent mediator.
"Each entreaty has been met with some combination of silence, combativeness, false assurances, and delay tactics."
Arunachalam alleged that "after three years the family’s tactics are nothing more than a robe to conceal their socially regressive gender bias.
"With only female heirs, the historically male dominated family business is effectively asking that my family assume a second class standing in AIL without any of the rights or privileges enjoyed by other families (many of whom have equal economic interests)".
She claimed that a considerable portion of her late father’s estate is tied to AIL, and it is entirely unreasonable to expect her family to relinquish control and visibility over these holdings to the broader Murugappa family.
"To date, no logical or legally valid explanation has been provided by the Murugappa family as to why my family should be subordinated in this manner," said Arunachalam adding that no other family branch, all of whom are shareholders in the company, has come forward to support her family. Instead, they have been united in casting her out as pariahs for daring to challenge the family’s male only business hierarchy.
It may be noted, at the AIL's annual general meeting last month, 91.36 per cent of the shareholders, mostly family members of Murugappa Group, of the Chennai-based holding company that controls the financial services-to-agro commodity conglomerate Murugappa voted against the resolution which proposed Valli Arunachalam's candidature for directorship in AIL.
She had earlier laid two proposals before other branches of the Murugappa group family - either give a board berth to her or her sister, or buy her family’s 8.15-per cent stake in AIL at a ‘fair value’.
Arunachalam, her sister Vellachi Murugappan, and their mother M V Valli Murugappan hold the stake together.
Her father, a former chairman of Carborundum Universal, passed away in September, 2017.
Arunachalam has been battling for the right to be recognised as her father’s successor to the board for a long time.
She would have been the first woman director of AIL if the shareholders had favoured the resolution.
AIL is registered with the Reserve Bank of India as a ‘systemically important non-deposit accepting core investment company’ (CIC). As a CIC, the company is primarily a holdco, holding investments in its subsidiaries and other group companies.
Founded in 1900, the Murugappa Group currently controls more than two dozen companies, including nine listed ones -- Coromandel International, EID Parry, Shanthi Gears, Carborundum Universal, Tube Investments of India, Wendt, Cholamandalam Financial Holdings and Cholamandalam Investment & Finance Company, among others.
The company’s consolidated profit before tax dropped 35 per cent in 2019-20 to Rs 637.17 crore, from Rs 979.14 crore, a year ago.
The profit for the year stood at Rs 616.53 crore, compared to Rs 962.86 crore a year ago - a drop of 35 per cent. Total income rose to Rs 442.40 crore, from Rs 409.79 crore.
The promoter holding as of March 31 stood at 45.75 per cent, while the promoter group holding was 48.98 per cent, the balance held with others.
Photograph: PTI Photo
