Chennai: Members of the Rs 37,000 crore Murugappa group
were surprised to read in some financial dailies about the rift in the
family over board membership in holding company Ambadi Investments, but
Executive Chairman M.M. Murugappan has assured that the matter will be
soon settled amicably.
Firing the first salvo was the US-based Valli Arunachalam, the daughter of late M.V. Murugappan, demanding a board membership for her or her sister in Ambadi Investments.
Arunachalam had alleged the group promoters have gender bias against women getting into family business and hence she or her sister were denied a board berth in Ambadi Investments after their father's death in 2017.
Demanding a board berth for her or her sister, she also said if the demand is not met, then the other branches of the family should pay a fair market value for about eight per cent stake held in Ambadi Investments.
With the family rift hitting the news pages, Murugappan, Executive Chairman of the group, sent out a mail to all the senior officials in the group pointing out the clear demarcation of ownership and management of the companies.
He also assured senior officials that the family rift will be amicably settled soon and it will not have any impact on the companies.
According to Arunachalam, she is trying to enforce her father's will to secure a board berth for the family member based on the shareholding in Ambadi Investments.
As per reports, she had broached the subject of board membership with the family seniors but didn't get a satisfactory reply and any affirmative action in that regard.
"The rift seems to be more to claim the family's right for a board berth. The issue will be sorted out smoothly. This is the first time the family tussle has come out into the open," a long-timer in the group told IANS preferring anonymity.
"It has been the group's practice not to bring in women into running the business, be it daughters or daughters-in-law. The female members of the Murugappa family are involved in running the schools owned by the group or come for other major functions," the official added.
One of the leading and respected industrial conglomerates, the Murugappa group has 28 business including nine listed companies.
The major companies in the group are: Carborundum Universal Ltd, Cholamandalam Financial Holdings Ltd, Cholamandalam Investment and Finance Company Ltd, Cholamandalam MS General Insurance Company Ltd, Coromandel International Ltd, Coromandel Engineering Company Ltd, E.I.D. Parry (India) Ltd, Parry Agro Industries Ltd, Shanthi Gears Ltd, Tube Investments of India Ltd, and Wendt (India) Ltd.
Except for two, all the other listed group companies are run by professionals.
"There is the Murugappa Corporate Advisory Board. While the Board is headed by a family member as Executive Chairman, the tenure ends when the person attains 65 years of age. The transition has always been smooth," another senior official of the group told IANS on the condition of anonymity.
"Not all the male heirs of the family get to head a group company. A family member enters the group business as a management trainee and goes up in the ladder purely on performance," a group official pointed out.
Group officials told IANS that for many this is the first time they are hearing the name of Valli Arunachalam.
When queried about Arunachalam's demand of paying the family a fair market value for the stakes held, group officials said she or her family may not go the extent of selling out to outsiders if the other members of the Murugappa family do not buy them out.
"It may not be worthwhile for an outsider to acquire the stakes held by Arunachalam's family. The buyer will get only a minor stake and will not have any major voice in running the group against the other family members," the official said.
Officials are of the view that it may be the time for the Murugappa family to decide on inducting the female members of the family into business after this issue.
Contacted for comment, Executive Chairman Murugappan told IANS that a formal response would be sent soon.
With Murugappan assuring the group executives that the family rift will be amicably settled, officials hope that all will end well.
(Venkatachari Jagannathan can be contacted at email@example.com)