CHENNAI: The ongoing conflict between ‘Chettiar Raja’ and his adopted heir, which resulted in Sunday’s fracas at the Chettinad Palace, has been a long and oft-surfacing issue in Chennai’s corporate circles.
Less than a year ago, the CBI picked up the Registrar of Companies in Chennai. The charge? Allegedly accepting a Rs 10 lakh bribe from MAM Ramaswamy to declare all decisions that were to be made in an annual general body meeting null and void. The AGM, incidentally, voted against the reappointment of Ramaswamy to the board of the Chettinad Group’s flagship concern - Chettinad Cement. It also cost him the chairmanship of the flagship and sparked rumours of a boardroom coup.
The CBI, at that time, stated that Ramaswamy expected the AGM’s vote and had moved to stop his ouster from the helm of the company since he had been chairman for several years. The move failed, he was ousted, appointed Chairman Emeritus and later L Muthukrishnan was appointed chairman of the company.
Muthiah has constantly and vehemently denied rumours that the ouster was a boardroom coup.
The friction between Muthiah and Ramaswamy has its roots in differences on how to run the company and the group, say sources in the know. However, the same sources add that Muthiah has proved himself to be a canny and capable businessman, ever since he took over as managing director in 1999 and made most key decisions.
Ramaswamy’s interests, meanwhile, at least in the last decade, revolved around other issues, notably the Annamalai University. But with the government taking over the institution following ‘mismanagement’, sources claim that Ramaswamy had begun refocusing his attention on the group - and Chettinad Cement in particular.
But Muthiah already had a firm handle on things, increasing the capacity of Chettinad Cement to 13.5 million tonnes per annum from 1 million tonnes when he took over the reins.
He also increased the business of the company to Rs 4,000 crore from Rs 600 crore in the same period. “He is a very capable industrialist,” said an industry source.
The weeks before that AGM on August 27, 2014, began hinting at the first public signs of the tussle between father and adopted son.
Ramaswamy, it was rumoured, even filed a police complaint claiming his life was in danger from a ‘family member’ but had it withdrawn on the day of the AGM. He had complained that his house had been encircled with men not his own and he feared for his life — not unlike what he alleged on Sunday.
The group is currently controlled by Muthiah, his wife Geetha and some holding companies founded by Muthiah. Together, they own 74 per cent of equity.
Ramaswamy owns 24 per cent. Ramaswamy and his wife Sigapi Aachi adopted Muthiah in 1995 for want of biological heirs.