Murugappa family settles disputes and differences with Valli Arunachalam, withdraw legal proceedings

Murugappa family, the promoters of Chennai-based diversified Murugappa Group, on Sunday announced a settlement agreement among its members putting an end to the fight that arose after the death of MV Murugappan.

In a statement, the family said its members have agreed to settle the disputes and differences between the family branch of late MV Murugappan (including Valli Arunachalam and Vellachi Murugappan), on one side, and the rest of the family members without disclosing details citing confidentiality.

The Murugappa family announced that its members have agreed to setle the disputes and differences between the family branch of late Mr. M V Murugappan (including Valli Arunachalam and  Vellachi Murugappan), on one side, and the rest of the family members, on the other side, which arose post the demise of late Mr. M V Murugappan. 

The members of the Murugappa family first discussed and concluded the terms of the family arrangement amongst themselves at a meeting in the presence of their respective advisors. This understanding was recorded today by way of a memorandum entered into by the members of the Murugappa family with the family branch of late Mr. M V Murugappan (including Mrs. Valli Arunachalam and Mrs. Vellachi Murugappan). The family members are commited to undertake the necessary transactions to effect the family arrangement within the next 90 days.

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The family arrangement is envisaged primarily to bring about amity and maintain goodwill amongstthe members of the Murugappa family, and to maintain the overall harmony within the family, in this generation, as well as in the future.

“The family arrangement ensures that all the issues between the members will be setled, and they are happy that they have agreed to resolve this amicably. The terms of the family arrangement itself are confidential”, said representatives for the family members.

As part of the family arrangement, the parties have also agreed that all legal proceedings betweenthe family groups will be withdrawn as per the terms of the family arrangement afer all agreed steps specified in the family settlement have been completed.

The statement, however, said that "no listed company forming part of the Murugappa Group is a party to the family arrangement, and nothing in the family arrangement relates to the management or control of, or grants any special rights to the parties in, any such companies".

The group has 11 listed entities, including Carborundum Universal Ltd, Cholamandalam Investment and Finance Company Ltd, Coromandel Engineering Company Ltd, Coromandel International Ltd, EID Parry (India) Ltd and Tube Investments of India Ltd, among others.

Quoting family representatives, the statement said, "The family arrangement ensures that all the issues between the members will be settled, and they are happy that they have agreed to resolve this amicably. The terms of the family arrangement itself are confidential."

“Though the disclosure does not mention any specific change or change in rights or restrictions etc, the development is welcome from an investor perspective that disputes between family members are settled and will definitely give a feeling of stability,” said  Makarand Joshi, founder, MMJC and Associates – a corporate compliance firm on the family arrangement between the members of the Murugappa Family.

It is also not clear whether the issues have been resolved based on a will drafted earlier or is it based on mutually compromise.

A seamless family settlement augurs well than a legal option of going to the court, considering that the latter is a long drawn, dull and expensive process without any assurance of a pleasant outcome.

The ₹74,200-crore Murugappa group, which began in the banking markets of Burma in the 1900s, currently operates 29 businesses catering to diverse markets around the world. It has a presence in 40 countries across six continents employing over 73,000 employees.

Its businesses span from agriculture, engineering, and financial services to others such as tea, rubber, construction, polymer fabrics, textiles and travel solutions.