MAM will need more than horse sense to regain control

A seemingly conservative business group with diverse interests in sectors such as cement and healthcare hit the headlines recently for all the wrong reasons as the battle for its control between the father-son duo, turned ugly with the arrest of the head of Registrar of Companies who was allegedly bribed by the patriarch of the organisation to help him retain the reins over the business.

The power struggle in the multi-crore Chettinad Group of Companies was talked about in hushed tones in corporate corridors until an internal family feud between its chairman and well known racing icon MAM Ramaswamy and his adopted son MAMR Muthiah  spilled over to the public domain with the former allegedly bribing the top Company Affairs official to help him retain control over the group which was sought to be reportedly usurped by Muthiah.

The business group has left a mark on everything it has touched, be it information technology, education, healthcare, plantations, shipping, transportation, granite, logistics or farming. Coming from the southern part of Tamil Nadu, the Chettiars are a conservative community of traders and financiers with traditions that run deep.
With the recent arrest of the Chennai head of the Registrar of Companies, that the ministry of corporate affairs wing is making sure that organisations file all the information required by the Companies Act, is the latest manifestation of an almost one-decade-old battle between Ramaswamy and his adopted son for the control of the Rs 5,000 crore business conglomerate. The 84-year old Ramaswamy was the chairman of Chettinad Cement while Muthiah served as its managing director till the shareholders of Chettinad Cement Corporation at its annual general body meeting resolved not to renew Ramaswamy’s appointment as one of the directors on its board.

The AGM virtually looked as a mere formality with only a couple of speakers raising issues about the company's financial aspects. The customary chairman’s speech was not read. In addition, the two nominees of the state government did not attend the meeting. At the tame meeting, one of shareholders said, “Mr Ramaswamy should not be troubled as he is more than 80 years old and even finding it difficult to walk.” Another shareholder immediately proposed an amended resolution seeking not to reappoint Ramaswamy, who did not attend the meeting as he was admitted in hospital at that time.

Strained relations

After Muthiah took over the reins of the group as its managing director in 2000, Ramaswamy was playing a supportive role. After his wife Sigapi Achi died, the relations between foster father and adopted son became strained. Muthiah then began luring persons in top positions in the group to take over the whole business, which irked Ramaswamy, but he couldn’t do much.

In late July, apparently without mentioning anyone’s name, Ramaswamy lodged a complaint with the Tamil Nadu police that he was facing a threat to his life from people around him who had installed several security cameras in various places of the house. However, during investigation, concerned person told the police that he had installed the cameras ‘for Ramaswamy’s safety’ and that his action had been ‘misinterpreted.’

Ramaswamy also faced another trouble two years ago when the state government took over administrative control of Annamalai University, which his grandfather had founded in 1929, following reports of financial irregularities. By Ramaswamy’s own admission before the Madras high court a year ago, Annamalai University’s deficit had gone up to Rs 272.6 crore and a liability of Rs 238 crore at the time of the government taking it over.

Ramaswamy, as pro-chancellor of the university, had been enjoying complete authority over it from 1984 onwards when his father died. Many faculty members and the staff in the university owe their employment to the benevolence of ‘Aiyya’ as Ramaswamy is fondly called within the group. It was during his tenure as chief of the Indian Hockey Federation that India went on to win the World Cup in Kuala Lumpur (1975) and a gold at the Moscow Olympics (1980). He had a brief stint in politics too. He got nominated to Rajya Sabha on a Janata Dal (Secular) ticket from Karnataka in 2004. Ramaswamy’s grandfather Rajah Sir Annamalai Chettiar started the business in 1912 and later co-founded what is now the state-owned Indian Bank.

Ramaswamy is passionate about horses. Come what may, he will never be tired of horse racing. Such is his zeal and passion for this sport, which has seen him earn the unique distinction of winning more than 400 classics, a feat that is unlikely to be bettered in a hurry. He was also recently elected chief steward of the Madras Race Club. A multi-faceted personality, he is an entrepreneur, educationalist, sports enthusiast and a connoisseur of arts and Tamil culture.

Ramaswamy, who shares his ancestry with former Union finance minister P Chidambaram, comes from a family of money dealers that, starting in the early 19th century, created a business empire. A C Muthiah, head of the M A Chidambaram Group and former head of the Board of Control of Cricket in India, is Ramaswamy’s cousin.
Now, uncertainty looms large over the business tycoon’s future with only a few loyalists, including some relatives and advocates alone giving him company.