Murugappa Group resolves longstanding family dispute, strikes deal

Necessary transactions to take place within the next 90 days; no impact on listed entities

Chennai-based Murugappa Group has successfully settled a long-standing family disagreement involving Valli Arunachalam, the eldest daughter of the late former Murugappa Group Executive Chairman, M V Murugappan, and other family members.

Valli, along with her sister Vellachi and their mother M V Valli Murugappan, initiated legal proceedings with the National Company Law Tribunal in 2020. They were seeking either a board seat in Murugappa Group’s holding company, Ambadi Investments (AIL), or fair compensation for their 8.23 per cent shareholding in AIL.  

Although the specifics of the settlement remain ‘confidential’, sources indicate that the family members have agreed to undertake “necessary transactions” as part of the family arrangement within the coming 90 days.

The agreement was formalised on Sunday through a memorandum signed by the members of the Murugappa family and the family branch of the late M V Murugappan.

This family arrangement also includes the cessation of all legal proceedings among family members once the agreed-upon steps outlined in the family settlement have been completed.

Valli’s father, Murugappan, died in 2017, and it was in 2020 that she publicly sought a board seat at AIL and also alleged gender bias. In September 2022, she voiced her readiness to engage in discussions with other family members to find a harmonious resolution to the protracted dispute.

It is noteworthy that “no listed company forming part of the Murugappa Group is a party to the family arrangement, and nothing in the family arrangement pertains to the management or control of or bestows any special rights to the parties in any such companies”, a source clarified.

The Chennai-headquartered group includes 11 listed companies such Cholamandalam Investment & Finance Company (with a current market capitalisation of Rs 83,599 crore), CG Power and Industrial Solutions (Rs 65,618 crore), Tube Investments of India (Rs 53,798 crore), Carborundum Universal (Rs 36,188 crore), Coromandel International (Rs 31,486 crore), Cholamandalam Financial Holdings (Rs 16,899 crore), E.I.D.-Parry (India) (Rs 8,092 crore), Shanthi Gears (Rs 3,452 crore), Wendt India (Rs 2,630 crore), Coromandel Engineering Company (Rs 151 crore), and Kartik Investments Trust (Rs 12 crore).

“The family arrangement is designed primarily to foster amity and maintain goodwill amongst the members of the Murugappa family and to preserve the overall harmony within the family, both now and in future generations. The family arrangement ensures that all issues between the members will be settled, and they are pleased to have reached this amicable resolution. The terms of the family arrangement are confidential,” stated representatives for the family members.

They further added, “The Murugappa family is delighted to announce that its members have agreed to settle the disputes and differences between the family branch of the late Murugappan, on one side, and the rest of the family members, on the other, which emerged after the passing of Murugappan. The members of the Murugappa family first discussed and concluded the terms of the family arrangement amongst themselves in a meeting attended by their respective advisors.”