After Murugappan’s demise in 2017, a bitter dispute erupted among Family members of the group’s promoters as Murugappan had named only his wife and daughters in his will, and Arunachalam demanded a non-executive board berth in the group’s holding firm Ambadi Investments Ltd as natural succession to her father’s board position.

Even though Arunachalam, after her father’s death, was informally assured by Family Members of the board position, when it came to a formal approval, Ambadi Investments, controlled by the family members, rejected her appointment on the board by passing a 91% vote against the proposal in an annual general meeting.

Upset with the allegedly misogynistic nature of the shareholders, Arunachalam sent a legal notice to Murugappa Group in October 2020, dragging them to the company law tribunal and stating that the male members of her family “cannot tolerate women in their boardrooms”.

The withdrawal of the lawsuits following the settlement may potentially usher in an era of stability for the diversified group.

“Though the disclosure does not mention any specific change in rights or restrictions, 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, the founder of MMJC and Associates, a corporate compliance firm.

To be sure, Murugappa group stocks have well outperformed the benchmarks despite the feud. The stock price of group firm Carborundum Universal Ltd jumped nearly fivefold from ₹219.6 on 31 March 2020 to ₹1,089 on 18 August; shares of Cholamandalam Investment and Finance Co. Ltd surged nearly seven times from ₹152.95 to ₹1,016.65; Cholamandalam Financial Holdings Ltd’s shares tripled from ₹290.05 to ₹899.95; Coromandel Engineering Co. Ltd jumped from ₹11.8 to ₹45.65; Coromandel International Ltd stock grew from ₹543.9 to ₹1,069.65; E I D-Parry (India) Ltd shares have gone up from ₹139.75 to ₹455.85.

Similarly, shares of Tube Investments of India Ltd have jumped from ₹274.2 to ₹2,783.65 during the same period.

The stock of newly acquired CG Power and Industrial Solutions Ltd has risen from ₹5.11 to ₹429.65 now, while shares of Shanthi Gears Ltd swelled from ₹66.55 to ₹450.05 and the stock of Wendt (India) Ltd has gone up from ₹1,748.65 to ₹13,150.

The group said Sunday the two parties have agreed to settle the disputes and differences between the family branch of late M.V. Murugappan, including Valli Arunachalam and Vellachi Murugappan on one side, and the rest of the family members, on the other side.

“The family members are committed to undertaking the necessary transactions to effect the Family Arrangement within the next 90 days,” the group said.

“As part of the family arrangement, the parties have also agreed that all legal proceedings between the family groups will be withdrawn as per the terms of the family arrangement, after all, agreed steps specified in the family settlement have been completed,” a statement by the group said.

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

Arunachalam had demanded a board seat in the group’s holding company based on the family’s 8.23% shareholding.

Joshi said it is still unclear whether the issues have been resolved based on a will drafted earlier or a mutual 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,” Joshi said.

Murugappa Group has reported double-digit growth for the second year in a row in the post-pandemic phase, with its revenue crossing ₹70,000 crore in FY23.

The group’s total sales rose 36% to ₹74,220 crore in FY23 from ₹54,648 crore in the previous year.

Updated: 20 Aug 2023, 11:51 PM IST