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This article is more than 1 year old.

Valli Aruncahalam vs Murugappa: Here's why the law may be on Valli's side

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On Thursday, Valli released a statement to the media stating that she has served a legal notice on members of the Ambadi Investments Limited board, members of the Murugappa family, and other related persons.

Valli Aruncahalam vs Murugappa: Here's why the law may be on Valli's side
Murugappa heir and fourth-generation member of the family, Valli Arunachalam, may have a watertight case against the group, according to legal experts. On Thursday, Valli released a statement to the media stating that she has served a legal notice on members of the Ambadi Investments Limited (AIL) board, members of the Murugappa family, and other related persons.
Valli is suing AIL and the Murugappa family over what she claims are continued attempts to prevent her from securing a position on the board of AIL, in line with her 8.15 percent stake in the company. Since the board of AIL has traditionally been occupied only by male heirs of the Murugappa family, Valli's attempt to secure a position has been met with opposition.
Valli’s appeal for a place on the board of AIL was most recently voted against by the board, at the company’s AGM held on September 22.
Valli has been clamouring for a position on the AIL board since her father, MV Murugappan passed away in 2017 leaving no male heirs. However, with multiple attempts to settle amicably having failed, the Murugappa scion has decided to take the legal route.
"I can hereby confirm that following careful and thorough deliberation and in consultation with our independent advisors, we have decided to seek legal remedies with respect to our ongoing efforts to settle my father’s will," said Valli in the statement, "Accordingly, we issued legal notices to the Murugappa family members, Ambadi Investments Limited management, and people in relation thereto."
'Valli's case is watertight'
Legal experts, who CNBC-TV18 got in touch with pertaining to the case, have said Valli is clearly on a legal high ground. "There can be no articles of association that discriminate on the basis of gender in any company," said Satish Kumar, a legal expert and the legal head of Ramco Systems. "By the look of it, Valli Arunchalam's case is a watertight one especially given that she is her family's Karta (rightful heir)," he added.
However, the only defensive position the Murugappa Group might take in the matter is the contention that Valli Arunchalam may have brought disrepute to the family and the group by taking a sensitive family matter to the media. "The fact that she has spent all this time outside the company but is now coming back to stake a claim, and is then going about making this a matter of public discussion is what the Murugappa counsel could possibly argue from a propriety standpoint," said Satish.
So far, the Murugappa Group has been tight-lipped on Valli's allegations, with unofficial channels from within the company telling CNBC-TV18 that the AIL board and the management believe that this is a family matter, best sorted within four walls. The group has thus not issued any statement with regard to Valli’s allegations or confirmed receipt of her legal notice.
Multiple attempts at settlement made by Valli
In Valli's defence, multiple attempts she claims were made to reach out to members of the family, before seeking legal recourse. "It was a big step for us and a very unfortunate one, as we have worked tirelessly over the course of the last three years to bring about an amicable settlement of my father’s interests in AIL," she said, "With the family voting unanimously to reject my appointment to the AIL board, we have seemingly reached the end of the road for an amicable settlement."
Training her guns yet again on the family's inherent patriarchy on the corporate front, Valli said the other Murugappa family branches were treating her family as "pariahs" for daring to challenge the male-only status quo. In an exclusive chat with the CNBC-TV18 managing editor, Shereen Bhan, in January, Valli called out the gender bias within the Murugappa Group on account of AIL's refusal to grant either her or her sister a position on the board.
"What is clear to us after three years is that the family’s tactics are nothing more than a robe to conceal their socially regressive gender bias," she said in her statement today, "With only female heirs, the historically male-dominated family business is effectively asking that my family assume a second class standing in AIL without any of the rights or privileges enjoyed by other families many of whom have equal economic interests."
Valli's statement adds that no legally tenable response has been provided by the Murugappa family pertaining to why the board of the AIL refuses to grant her a seat at the table, despite her shareholding. However, with legal notices sent out to the remainder of the family, it is amply clear that what was once a family feud is now likely to make a date with the judiciary.
"We recognise that our efforts have broader implications, especially with respect to gender equality, which is crucial for India to realise its full economic potential and social parity," Valli signed off.
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