Succession saga at Murugappa Group gets murkier
Valli Arunachalam had alleged that the group promoters have a gender bias against women getting into the family business and, hence, she and her sister were denied a berth on AIL’s board.
Valli Arunachalam, the eldest daughter of former Murugappa group executive chairman M V Murugappan, and her family have moved the National Company Law Tribunal (NCLT), Chennai, seeking waiver of the minimum shareholding requirement of 10 per cent to maintain the alleged oppression and mismanagement case against Ambadi Investments (AIL), the flagship company of the Rs 38,000-crore group.
The NCLT has given the respondents three weeks’ time to reply and posted the matter for April 23.
Senior Counsel P S Raman, who appeared for Arunachalam, argued that the family owns 8.21 per cent in AIL and falls short of the minimum requirement by 1.79 per cent, according to section 241 of the Companies Act 2013.
The main allegation is that there has been a history of gender discrimination in the Murugappa Group.
Raman said the plea for equal representation in company affairs had been denied since her father’s death a few years back.
“Murugappan is the only family member who does not have a male legal heir.
“We are making a very serious allegation of gender discrimination.
“When Valli Arunachalam’s name was proposed to the board, the reply was that she was not qualified,” Raman argued on Wednesday.
He pointed out the main petition also seeks a fair buyout of their stake as per section 242 (2b) of the Companies Act 2013.
On September 21, 2020, AIL’s shareholders, largely uncles and cousins of Valli Arunachalam, voted against her appointment to the board.
Arunachalam has been battling for the right to be recognised as her father’s successor.
Only 8.64 per cent voted in favour of the resolution, while 91.36 per cent voted against the resolution.
She had alleged that the group promoters have a gender bias against women getting into the family business and, hence, she and her sister were denied a berth on AIL’s board.
AIL’s board had eight members, all of them men.
She had made two proposals before the other branches of the Murugappa group family — either give a board berth to her or her sister Vellachi Murugappan, or buy her family’s 8.15 per cent stake in AIL at a fair value.
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.
Arunachalam is the karta of the MVM Hindu undivided family, which holds the stake in AIL.
AIL is registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit Accepting Core Investment Company (CIC).
As a CIC, it is primarily a holding company, with investments in its subsidiaries and other group companies.
The company’s consolidated profit before tax dropped by 35 per cent in 2019-20 to Rs 637.17 crore from Rs 979.14 crore a year ago.
Profit for the year stood at Rs 616.53 crore as 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.
Promoter holding as on March 31, 2020, stood at 45.75 per cent, while promoter group holding was 48.98 per cent.
Source: Read Full Article