Valli moves NCLT, seeks minimum holding waiver

By: |
March 11, 2021 7:00 AM

The petition also alleges that the structure and manner of holding of some of the companies has been altered without the consent of the petitioners, without them being informed and with malafide intent to partition the group company-wise.

The petition also alleges that the structure and manner of holding of some of the companies has been altered without the consent of the petitioners, without them being informed and with malafide intent to partition the group company-wise.The petition also alleges that the structure and manner of holding of some of the companies has been altered without the consent of the petitioners, without them being informed and with malafide intent to partition the group company-wise.

Valli Arunachalam, ‘karta’ of MV Murugappan Hindu Undivided Family (HUF), who has been denied a board seat in the holding company Ambadi Investments (AIL), on Wednesday took the matter to court.

The MVM family — comprising Valli, her sister and their mother — moved the Chennai bench of National Company Law Tribunal (NCLT) seeking waiver of the minimum 10% shareholding required to ensure the alleged oppression and mismanagement case against AIL is maintainable. It also sought board representation or alternately that its 8.21% stake in AIL be bought out.

Counsel to the MVM family pointed out its 8.21% stake in AIL, falls short of the required 10%, adding the NCLAT had granted a similar waiver to Cyrus Mistry’s firms in his case against Tata Sons.

The application for the waiver was filed under Section 244 of the Companies Act, 2013 (Companies Act) read with Rule 83A of the National Company Law Tribunal Rules, 2016.

The MVM family has alleged deliberate non-disclosure of information, suppression and mismanagement in the management of affairs at AIL. Valli, daughter of the Rs 38,000-crore Group’s late chairman MV Murugappan, has said it is unfair to be discriminated against and denied representation and a management role,on the grounds of gender.

The petition also alleges that the structure and manner of holding of some of the companies has been altered without the consent of the petitioners, without them being informed and with malafide intent to partition the group company-wise.

The MVM family points out that the shareholding of the Muruguppa Group is fragmented with none of the respondents — inter alia family members also directors in AIL, owning more than 10%. Apart from the MVM family, all identifiable branches have position on the board and participate in affairs of AIL. Moreover, the MVMfamily ahs not been offered a fair price for its 8.21% stake.

In Septmeber 2020, the AIL shareholders, comprising largely family members, voted against the resolution to appoint Valli a non-executive director with 91.36% of votes cast against her appointment. Valli sent a legal notice to the Murugappa group and the family members.Under the Hindu Succession (Amendment) Act, 2005, women can become the karta or head of the family and daughters can become coparceners and inherit as much as sons.

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