A 120-year-old Indian business conglomerate may be headed for a legal battle on allegations of sexism within the family that has run it for five generations.
Valli Arunachalam, a 59-year-old New York-based scientist and part of the Murugappa family that runs the $5.7 billion (Rs38,105) Murugappa group, has alleged that the male members of her family “cannot tolerate women in their boardrooms.” Arunachalam is the elder daughter of the group’s late executive chairman MV Murugappan, who was the patriarch of the family until his death in 2017. He is survived by his wife, two daughters, and grandchildren.
Arunachalam’s allegations came a day after more than 90% of the shareholders at the group’s annual general meeting (AGM) on Sept. 21 voted against a proposal to give her a seat on the board of the group’s holding company, Ambadi Investments (AIL). The members of the board mostly consist of Arunachalam’s uncles and male cousins.
“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,” Arunachalam said in a statement yesterday (Sept. 23). “It is a clear indication that gender bias exists at the highest levels of the Murugappa group.”
Founded in 1900, the group runs 28 businesses, including nine listed companies. Its businesses are market leaders in several segments, including auto components, transmission systems, cycles, sugar, farm inputs, fertilisers, bio-products, and nutraceuticals, among others.
“The fourth generation of Murugappa Group promoters is now navigating the group’s strategic direction and growth, while the fifth generation has taken up different roles across functions and businesses,” according to the group’s website.
If Arunachalam had won the vote at the AGM, she would have been the first-ever women director of the Murugappa group.
In January this year, Arunachalam had said that she had discussed two options of inheritance with her uncle M V Subbiah and the current management of the company. The management could either allow her a seat on the board of AIL or let her exit by selling her stake to other family members at fair market value. But the board did not pay attention to her request because she is a woman, she had said.
Arunachalam holds an 8.15% stake in AIL, along with her mother. “Right now, despite being one of the largest shareholders in the company, we have zero visibility of the company’s operations. Requests for meetings since August 2019 have fallen on deaf ears,” she told Business Standard newspaper in January.
Meanwhile, the group’s spokesperson hasn’t reacted to Arunachalam’s charges, calling it a “family matter.”
But Arunachalam has now said she is ready to go to court, if needed.
“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, whilst a 23-year old male heir with a master’s degree and no job experience can be inducted to the board soon after his father’s passing,” Arunachalam’s statement read criticising the induction of her younger cousin to the group’s board.