In pursuit of AIL board seat, Valli Arunachalam issues legal notice to Murugappa family

Dr Valli Arunachalam, daughter of Murugappa Group’s former executive chairman M V Murugappan, has issued legal notices to members of the Murugappa family, Ambadi Investments Ltd, the group’s holding company, and others in her fight for a seat on the firm’s male-dominated board.

The US-based 59-year-old nuclear scientist’s proposal to be inducted as a non-executive director of the Rs 38,000 crore family-business conglomerate’s board was rejected at the 79th annual general meeting (AGM) of the company held via video conferencing on September 21. If the proposal was accepted, Valli Arunachalam could have been the first woman to have been appointed to AIL’s board.

Valli Arunachalam, her mother M V Valli Murugappan and sister Vellachi Murugappan jointly hold 8.15 per cent share bequeathed to them by Murugappan, who died in 2017. Murugappan’s family is not represented in the board after his death as he did not have a male heir. Murugappa Group, as a policy, does not appoint women to its board.

Also read — Murugappa Group rejects proposal to induct Valli Arunachalam as board director

Over a fortnight after the decision, which she had termed unfortunate, Valli Arunachalam released a detailed statement on Wednesday explaining why she, her sister and their mother had to take the legal recourse to settle the matter.

“We issued legal notices to the Murugappa family members, Ambadi Investments Ltd. (“AIL” or the “Company”) management, the Company, and other people in relation thereto. It was a big step for us and a very unfortunate one, as we have worked tirelessly over the course of the last three years to bring about an amicable settlement of my father’s interests in AIL,” she said in the statement.

She added they have seemingly reached the end of the road for an amicable settlement after the Murugappa family voting unanimously to reject her appointment to the AIL board.

“It would be impossible to enumerate each step we have taken over the last three years, but we can assure you that we, together with our advisors, have taken the leave-no-stone-unturned approach in an effort to bring about an amicable settlement. Such efforts include, inter alia, a proposal for the engagement of an independent mediator,” she said.

Contending that each entreaty was met with some combination of silence, combativeness, false assurances, and delay tactics, Valli Arunachalam said they have no confidence that their “substantial stake” in the business will be safeguarded by the Murugappa family given how they “treated our family branch over the past three years.”

“What is clear to us after three years is that the family’s tactics are nothing more than a robe to conceal their socially-regressive gender bias. With only female heirs, the historically male-dominated family business is effectively asking that my family assume a second class standing in AIL without any of the rights or privileges enjoyed by other families (many of whom have equal economic interests),” she said.

Maintaining that a considerable portion of her late father’s estate is tied to AIL, Valli Arunachalam said it was entirely unreasonable to expect her family to relinquish control and visibility over these holdings to the broader Murugappa family. She also said the Murugappa family has not given a logical or legally valid explanation as to why “my family” should be subordinated in this manner.

“What is most hurtful is that despite my father’s lifetime of dedicated service to the family and business, no other family branch, all of whom are shareholders in the company, has come forward to support us. Instead, they have been united in casting us out as pariahs for daring to challenge the family’s male-only business hierarchy,” she added.