Chettinad Group patriarch disowns son, pledges assets to charity3 min read . Updated: 10 Jun 2015, 09:28 AM IST
Development comes less than a year after M.A.M. Ramaswamy lost the chairmanship of Chettinad Cements
Chennai: M.A.M Ramaswamy, the 84-year-old industrialist, promoter and former chairman of the Chettinad Group, pledged his assets and some properties to two charitable trusts on Tuesday, following a prolonged power struggle with his adopted son M.A.M.R. Muthiah.
“Ayyappan (Muthiah’s original name) is trying to grab the little assets I still own," said Ramaswamy, who also publicly disowned his son at a press conference at Chettinad Palace in Chennai. “As a substantial part of my properties is now with Ayyappan, I decided that every bit of what is left with me should go to charity."
The news comes less than a year after Ramaswamy lost his position as chairman of Chettinad Cements, a company managed by his estranged son. Ramaswamy, who owns 22% of the Chettinad Group, shares lineage with former finance minister P. Chidambaram and is a former Rajya Sabha member.
Muthiah and his wife Geetha have 70% stake in the privately held Chennai-based industrial conglomerate that operates in sectors ranging from cement to information technology. The public holds the remaining stake.
“He is a frustrated man because he has lost of control of companies. That is the reason for him to disown me," said Muthiah.
Ramaswamy’s action could have an impact on the ownership of the highly-valued Chettinad Palace, sprawling across 20 acres on the banks of the Adyar river. Ramaswamy owns 50% of the palace and the remaining is held by a handful of trustees, including Muthiah. Ramaswamy also owns a stable of thoroughbred racehorses and is believed to be the first horse owner to win over 500 classics (India has five classic races every season).
Ramaswamy has transferred certain properties and assets to two trusts—Dr M.A.M Ramaswamy Chettiar of Chettinad Charitable Trust and Dr M.A.M Ramaswamy Chettiar Trust. He declined to comment on the total value of assets transferred or the value of the Chettinad Palace.
“He will not perform any ceremonies or obsequies on my demise," said Ramaswamy.
The comments came just days after Muthiah extended an olive branch to his father and said he wanted to make peace with him.
“We are in discussions with eminent lawyers on adoption and will take a legal course of action," said Ramaswamy’s advocate A. Nagarajan, adding that the law was not clear about the cancellation of adoption.
“Adoption is irrevocable and unlike divorce one cannot end the relationship," said Muthiah, adding, “I have been seeking a constructive way to solve the issues with him but people close to him are poisoning his mind."
Ramaswamy’s cousin, A.C Muthiah, head of the M.A. Chidambaram Group that owns Southern Petrochemical Industries Ltd (SPIC), said Muthiah has effectively and cleverly taken control of the Chettinad Group.
Ramaswamy and his wife Sigappi did not have any children and adopted Ayyappan, son of R.M. Sekkappa Chettiar, and re-named him M.A.M.R Muthiah in 1996.
Ramaswamy went against the custom of the Nattukottai Nagarthar community and adopted an outsider (most adopt a close relative). Most of the Chettiar community avoided attending the ceremonial rites related to the adoption to show their displeasure.
“Raja Annamalai Chettiar, our grandfather, has clearly mentioned in his will that the Chettinad Palace cannot pass on to an adopted heir outside the family," said A.C. Muthiah.
The feud between father and son has been simmering for a few years. In the past year-and-a-half, Muthiah has filed eight cases against his father. Last July, Ramaswamy filed a complaint with the Chennai police citing a threat to his life from people around him and had security cameras installed around his house.
Ramaswamy lost his position as the chairman of the board of Chettinad Cements last year after shareholders voted against his re-election. A day prior to the annual general meeting, the Central Bureau of Investigation arrested the registrar of companies in Chennai, allegedly for receiving a bribe from an agent of Ramaswamy for declaring the proceedings of the board meeting void. It was evident that Ramaswamy and his son were fighting for control of the group.
“There is likely to be a long legal battle if Muthiah is recognised as a legal heir who has a natural right to the ancestral properties. M.A.M. (Ramaswamy) may not have the freedom to dispose of ancestral properties the way he wishes, though he can do so with his acquired properties. There could be differences in views and hence a long court case," said Kavil Ramachandran, a professor at Indian School of Business who specializes in family enterprises.