Family not even informed about reported restructuring, says Valli Arunachalam

By: |
December 9, 2020 3:00 AM

Speaking to FE over phone, Arunachalam said that the restructuring exercise has been done to safeguard the Murugappa family's interests, rather than protecting the interest of the shareholders.

Speaking to FE over phone, Arunachalam said that the restructuring exercise has been done to safeguard the Murugappa family's interests, rather than protecting the interest of the shareholders.Speaking to FE over phone, Arunachalam said that the restructuring exercise has been done to safeguard the Murugappa family's interests, rather than protecting the interest of the shareholders.

Valli Arunachalam, ‘karta’ of MV Murugappan Hindu Undivided Family, who has been fighting for representation in the Murugappa Group holding company Ambadi Investments (AIL) on Tuesday said that her family branch has been ignored in the recent reported restructuring of the over Rs 38,000 crore Murugappa Group.

Speaking to FE over phone, Arunachalam said that the restructuring exercise has been done to safeguard the Murugappa family’s interests, rather than protecting the interest of the shareholders.

“This is a major corporate restructuring of the Murugappa group. In keeping with the spirit of the Murugappa Group as outlined on their website – namely respect, integrity, responsibility, the family should have respected all major promoter shareholders and exhibited integrity and responsibility by including them in the decision making process. But their actions do not reflect this,” she said.

Arunachalam said that it seems that only her family was kept out of all this process. From the media reports it appears that the Murugappa group is looking to ensure family unity and accommodate interests of all family members by giving them a voice in the future of the group.

“Yet, despite my mother, sister and I being part of the same larger family, none of us were even informed about this restructuring, let alone been given a role to play. It is as if we do not exist for the family, even though we are significant promoter shareholders and not too long ago, my late father was playing an active role in the business. In fact, we learned about it from the media coverage,” she said.

Arunachalam is the daughter of the conglomerate’s late executive chairman, MV Murugappan, and following his death in 2017, she, her sister and their mother hold 8.15% stake in AIL.

Arunachalam who had sent a legal notice to the Murugappa group and the family members, post rejection of her resolution for a board seat by shareholders of Ambadi Investments said that they have been deprived and continue to be deprived of important information that pertains to their significant interests in the family business.

“This is yet another glaring example of how we, the only family branch without a male heir, are kept in the dark on major or important business decisions such as this,” she said.

Dwelling in detail about the restructuring plan of the Murugappa Group, she said that she understands that all next-gen leaders shall be mentored, guided and handheld by the senior members to take the business to the next stage.

“It is shocking that in this day and age, the Murugappa family continues to only include sons in the next-gen restructuring and to blindly overlook the daughters. Both my sister and I form part of the next generation of the Murugappa family and are able individuals with strong professional qualifications. Yet, we are being kept out of the business and our interests are being disregarded once again,” she said.

On whether dismantling of the corporate advisory group (CAG) and letting the direct control by family members of the respective companies do good, Arunachalam said given her 24 year work experience in Fortune 500 multinational companies, she feels that CAG’s are an extremely valuable resource to business groups. They are instrumental in building synergies across the various businesses, in establishing and maintaining a strong overarching value system, and in providing diversity and objectivity in the thought process on matters ranging from succession planning to business strategy.

When asked about the legal proceedings she initiated against the group, she said that she will refrain from commenting on it.

In September, AIL shareholders, comprising largely family members, voted against a resolution to appoint her a non-executive director of the company with 91.36% of votes cast against her appointment. “With the family voting unanimously to reject appointment to the AIL board, we have seemingly reached the end of the road for an amicable settlement,” she had said in a statement announcing the move to send legal notice to the group.

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