 "Chettinad")
This was 84-year-old MAM Ramaswamy on June 9 at his residence, the palatial Chettinad House in Chennai. And the heir he had so imperiously disowned was his adopted son, MAMR Muthiah. The setting was appropriate for the dramatic occasion, given that the over Rs 10,000-crore Chettinad group is considered industrial royalty in South India and tales of palace intrigues had been a staple.
Ramaswamy’s choleric outburst was in response to his son’s overture five days earlier that he was ready to surrender to his father’s wishes and put an end to “the family issue”. In his highly-secure office in the city, Muthiah, known as Ayyappan before his adoption, had told journalists, “My life is in danger and I have been advised to ensure my protection at all times.” Then, coming to the point, he said, “I am ready to go to any extent to find a solution. I can surrender to him (Ramaswamy), but he doesn’t even want to talk.” He had one condition, he added — that his father should not interfere in the affairs of Chettinad Cement Corporation, the flagship company of the group. “He should accept that he is old now and his health does not allow him a big role in business.”
MAM Ramaswamy
The tussle over Chettinad Cement saw a theatrical turn on August 26 last year when the Central Bureau of Investigation arrested M Manuneethi Cholan, the registrar of companies in Chennai, for allegedly accepting a bribe of Rs 10 lakh from Ramaswamy. What the alleged gratification was meant to subvert became clear the following day, when shareholders at the Chettinad Cement annual general meeting voted against the reappointment of the octogenarian as a director in the company, 70 per cent of whose stakes are held by Muthiah and his wife. The investigating agency maintains that Ramaswamy, apprehending his removal from the Chettinad Cement management, had paid Cholan to declare any decision taken at the AGM as “null and void”. Ramaswamy, of course, denies this and says that Cholan only wanted his help in getting a job for his brother’s wife in Tamil Nadu Education University.
Strong protestations from either side could not stop people talking of a “succession war” in the group. Bemused mediapeople and many others wondered why Muthiah was in such a hurry to grab the company and assets that were under Ramaswamy’s possession, including Chettinad House, given that he was, in any case, the legal heir to the family business. When Muthiah countered with, “Why would I do that when after my father everything is going to come to me?”, he was asked why then had he wanted his father out of the company. He replied, “I am conscious of the fate of Annamalai University and did not want the same to happen to the Chettinad group.”
The allusion was to the Tamil Nadu government taking over administrative control of Annamalai University in 2013 following allegations of financial irregularities. The institution had been founded by Ramaswamy’s grandfather in 1929. After his father’s death in 1984, Ramaswamy had been exercising control over the university as its pro-chancellor.
The university in question had been started by Annamalai Chettiar, youngest of the three sons of Satappa Ramanatha Muttaiya, famously know as SRMM. The other sons were Chidambaram Chettiar and Ramaswami Chettiar, founder of Indian Bank. Annamalai, who founded the Chettinad Group, was conferred the title of “Rajah of Chettinad” by the British. Annamalai’s son, M A Muthiah Chettiar, inherited and expanded the Chettinad Group, while another son, M A Chidambaram, founded the SPIC Group.
Muthiah Chettiar’s sons, MAM Muthiah and MAM Ramaswamy, inherited the business, and with the demise of his childless elder brother in 1984, the reins passed to the younger sibling. The group by then was engaged in cement and minerals, transport, agriculture, coal, textiles, healthcare and education.
Since Ramaswamy too did not have children, in 1995 he decided to adopt Ayyappan, son of RM Sekkappa Chettiar, who was in his early 20s then, and renamed him MAMR Muthiah. Family insiders say that besides his intelligence, the young man’s name was his fortune — Ramaswamy is an ardent devotee of Lord Ayyappan.
But as the script of the Chettinad family drama would have it, problems attended even this adoption. According to Ramaswamy’s cousin and Chairman Emeritus of SPIC,
A C Muthiah, Ramaswamy faced a lot of opposition to the adoption. Among the Nagarathars, adoption, while common, is valid only when the adopted boy belongs to the same temple as the adopter. Community elders alleged that Ayyappan and Ramaswamy went to different temples.
The question is now moot, because 20 years after giving his family name to Ayyappan, Ramaswamy has gone back to the temples to get their nod for the annulment of the exercise. “I have now cancelled the adoption and the temples have also accepted it,” says the industrialist. “Whatever the law may be, he is no longer my son. To me, he is now only S Ayyappan and not MAMR Muthiah.”
Ask him why he has taken the drastic step, and the old man says, “We trusted him in everything, and he clandestinely transferred a substantial part of our properties and powers to himself. He also forced me to make him the managing director of Chettinad Cement. He was not only disloyal, but ungrateful.”
A stung Muthiah remonstrates that “the actions my father is taking are inappropriate and will not take him in a positive direction. It is not possible to rewind 20 years.” He insists that the absence of anyone to advise his father, the oldest member of the family, is at the root of the problem and says that since the internecine dispute began, nearly 200 people, including industrialists, politicians and even the police, have tried to bring about a truce in vain. “My father’s character was always like this. It’s either his way or no way,” says Muthiah.
A chief executive of a company explains the father-son quarrel as one that is fundamentally about the styles of management. While Ramaswamy believes in running the show through loyal aides, Muthiah's style is about putting a system in place and controlling the policy and costs more professionally. But this divide is taking a generational aspect, with the younger lot in industry circles supporting Muthiah and his more modern corporate approach, while seniors affirm that experience and age should be taken into consideration. They point out that Muthiah shouldn’t have ousted his father from the company, thus deflating the ego of someone who had enjoyed social stature and corporate power throughout his life.
But Muthiah says that he has worked hard to take Chettinad Cement from a company with 400 employees and market capitalisation of a mere Rs 60 crore to one that today has 4,000 workers and a market capitalisation of Rs 4,000 crore with a production capacity of 20 million tonnes a year. “MAM (Ramaswamy) never sat in the Chettinad Cement office,” concede some employees. “Before Muthiah took over, it was Sabaratnam, a non-family member, who actually ran the business for 38 years.”
So what next? The octogenarian has taken things to the brink. He has reworked his will and left “all assets which may be left at the time of my death” to two newly formed trusts — the Dr MAM Ramaswamy Chettiar of Chettinad Charitable Trust and the Dr MAM Ramaswamy Chettiar Trust — to be headed by AC Muthiah. The old man, who dotes on his grandchildren, two girls and one boy, has not listed anything for the youngsters in his will. Once the owner of derby winning horses, is the will Ramaswamy’s last attempt at reining in his adopted son?
