Valli Arunachalam fails to win board seat, to take legal recourse

By: |
September 23, 2020 7:30 AM

Arunachalam, karta of MV Murugappan HUF, told FE she would not shy away from taking the matter to court.

Post Murugappan’s death in 2017, Arunachalam, her sister and their mother hold an 8.15% stake in AIL.

With an overwhelming 91.36% of the shareholders of the Murugappa Group voting against a board seat for Valli Arunachalam in the holding company, Ambadi Investments (AIL), the daughter of the former executive chairman MV Murugappan has said she will “pursue justice and take all steps for the same”. Post Murugappan’s death in 2017, Arunachalam, her sister and their mother hold an 8.15% stake in AIL.

Arunachalam, karta of MV Murugappan HUF, told FE she would not shy away from taking the matter to court. “For more than a year now, I have been asking for a board seat, pending the settlement, to make sure our rights are preserved as a promoter and major shareholder. Finally, they agreed to allow my board nomination, but they did not appoint me in the interim, and asked me to wait for the next AGM, which was more than 9 months away. Now, yet again, they have made clear their intent of continuing the oppressive and vexatious conduct against us,” she wrote in e-mailed response to FE.

An angry Arunachalam lashed out at the gender bias in the Murugappa Group and its inability to appreciate contributions by women. “The question remains as to why a female heir with a doctorate degree, 24 years work experience in fortune 500 multinational companies, and numerous patents and publications to her name, cannot be inducted to the board, even three years after her father’s death, despite being representative of the same shareholding whilst a 23-year old male heir with a master’s degree and no job-experience can be inducted to the board soon after his father’s passing,” Arunachalam wrote.

Arunachalam said she was shocked that despite efforts to resolve the matter amicably, the family had behaved in this fashion. “We made multiple attempts to ask the family to settle us per my father’s wishes by purchasing our stake in AIL at fair value. We have proposed many ways in which they can settle the matter amicably, including mediation, and they have refused,” she said.

Under the Hindu Succession (Amendment) Act, 2005, women can become the karta or head of the family and daughters can become co-parceners and inherit as much as sons. Arunachalam is the karta of the MVM Hindu undivided family, which holds the stake in Ambadi Investments.

Only four shareholders voted for the resolution to appoint Arunachalam to the board while 49 voted against it. The results of the voting, released a day after the holding company’s AGM showed, 8.64% of the votes were cast in her favour while 91.36% were cast against the resolution. The chairman of AIL, which controls the Rs 38,000-crore Murugappa group, is MA Alagappan.

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