The Murugappa Group has said that it has reached an agreement with Valli Arunachalam, the daughter of the group’s former executive chairman, the late MV Murugappan, on a dispute over Valli’s non-inclusion in the family business. Valli was denied a seat on the company’s board of directors in 2019 and she had challenged the decision terming it patriarchal. The statement issued by the group says the details of the agreement are confidential and that all legal proceedings between the family groups will be withdrawn as per the terms of the family arrangement.
In a press statement on Sunday, August 20, the Murugappa Group said, “The Murugappa family is pleased to announce that its members have agreed to settle the disputes and differences between the family branch of late MV Murugappan (including Valli Arunachalam and Vellachi Murugappan), on one side, and the rest of the family members, on the other side, which arose post the demise of MV Murugappan.”
The details of the agreement however have not been revealed. “The family arrangement ensures that all the issues between the members will be settled, and they are happy that they have agreed to resolve this amicably. The terms of the family arrangement itself are confidential”, the statement said.
The differences between the two parties within the company arose after the Murugappa Group’s holding firm Ambadi Investments rejected appointing Valli Arunachalam to the all-male board. Valli has since been pointing out the gender disparity within the company and has emphasised that it is the patriarchal mindset of her family members that has been a deterrence to her, despite her various qualifications that include over two decades of experience in working with Fortune 500 companies. Valli was rejected from being appointed as a director after 91% of the board voted against her appointment. Murugappa group traditionally only appoints male members of the family on its board of directors.
When MV Murugappan passed away in 2017, he left the 8.15% stake he held in Ambadi Investments to his wife and his two daughters. Over the past years, Valli, the older daughter, has been fighting for a say in the family business. In this regard, Valli and Vellachi have also sent legal notices to family members challenging the move to deny a seat on the board. Further, in 2021, the two women moved an application in the National Company Law Tribunal (NCLT), Chennai, seeking a waiver on the minimum shareholding requirement of 10% to maintain the case against Ambadi Investments, the holding company of the Murugappa Group. At the time they also alleged mismanagement and oppression by the family members. The Murugappa family members are the majority shareholders in Ambadi investments.
The statement says that listed companies that are a part of the Murugappa Group are not party to the family arrangement. “Nothing in the family arrangement relates to the management or control of, or grants any special rights to the parties in, any such companies,” the statement read.
Valli had asked for a board member seat in Ambadi investments which is not a listed company. It is unclear if this demand has been fulfilled or if Valli has been accommodated in any other capacity.
The statement from Murugappa Group also says that, “The members of the Murugappa family first discussed and concluded the terms of the family arrangement amongst themselves at a meeting in the presence of their respective advisors. This understanding was recorded today by way of a memorandum entered into by the members of the Murugappa family with the family branch of late MV Murugappan (including Mrs Valli Arunachalam and Vellachi Murugappan). The family members are committed to undertake the necessary transactions to effect the family arrangement within the next 90 days.”
The statement further says that, “The family arrangement is envisaged primarily to bring about amity and maintain goodwill amongst the members of the Murugappa family, and to maintain the overall harmony within the family, in this generation, as well as in the future,” also adding that, “As part of the family arrangement, the parties have also agreed that all legal proceedings between the family groups will be withdrawn as per the terms of the family arrangement after all agreed steps specified in the family settlement have been completed.”
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