Murugappa Group rejects proposal to induct Valli Arunachalam as board director

Ambadi Investments Limited, the holding company of Rs 38,000 crore family-run business conglomerate Murugappa Group, has rejected a proposal by Valli Arunachalam, daughter of the company’s former executive chairman M V Murugappan, to be inducted as a non-executive director.

If Valli Arunachalam’s notice had been accepted, she would have been the first woman to be on the board of the Chennai-based conglomerate which has interests from sugar to cycle to finance.

The 59-year-old nuclear engineer has been fighting with the male-dominated board to get her “rightful share” in the company in which Valli Arunachalam, her mother M V Valli Murugappan, and sister Vellachi Murugappan jointly hold 8.15 per cent share.

Reacting to the development, Valli Arunachalam said it was evident that the family cannot tolerate women in their boardrooms and indicated she would take the legal recourse as trying to settle issues within the family has not worked.

The 8.15 percent stake that Valli Arunachalam, her mother, and sister hold were bequeathed to them by her father M V Murugappan, who died in 2017. Murugappan’s family was not represented on 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, but there was hope that Valli Arunachalam could break the glass ceiling as the notice issued for the AGM listed her proposal under the “Special Business” item.

Sources said 91 per cent of shareholders voted out the notice filed by Valli Arunachalam to be inducted as a non-executive Director of the Company at the 79^th annual general meeting (AGM) of the company held via video conferencing on Monday.

Though the sources confirmed Valli Arunachalam will not be on the board, the Murugappa Group was tight-lipped on the development. The board of Ambadi Investments Limited consists of eight directors, including two independent directors.

“It is very unfortunate that the AIL shareholders, the overwhelming majority of whom are also board members, are not able to understand what contributions women can make on the board. It is a clear indication that gender bias exists at the highest levels of the Murugappa group,” Valli Arunachalam said in a statement.

The question remains as to why a female heir with a doctorate degree, 24 years work experience in fortune 500 multinational companies, and numerous patents and publications to her name, cannot be inducted to the board, even three years after her father’s death, despite being representative of the same shareholding, Valli Arunachalam asked.

She added that her family branch has been asking the majority shareholders in AIL to settle their shareholding in a fair manner.

“For more than a year now, I have been asking for a board seat, pending the settlement, to make sure our rights are preserved as a promoter and major shareholder. Finally, they agreed to allow my Board nomination, but they did not appoint me in the interim and asked me to wait for the next AGM, which was more than 9 months away. Now, yet again they have made clear their intention of continuing the oppressive and vexatious conduct against us,” she added.

Valli Arunachalam said that she and her sister would definitely pursue justice and vowed to take all the steps needed for the same.

“It was always our wish that the family issues remain within and are settled at the family level, but clearly it seems the family is more concerned about protecting its draconian perspectives and practices, even if it means forcing us to take the battle to courts. We will not shy away this time,” she said.

Valli Arunachalam had sent the notice on August 5, 2020, along with a requisite deposit of Rs 1 lakh proposing her candidature to the office of Director, be and is hereby appointed as a non-executive Director of the Company, liable to retire by rotation

“Resolved further that the Board of Directors be and are hereby severally authorized to file necessary forms and documents and do all such acts, deeds, and things as may be necessary for giving effect to the above resolution,” the notice issued on August 10, 2020 by Chairman M A Alagappan, read.