As business family feuds go, this one is in a class of its own. One of the combatants is M.A.M. Ramaswamy, who is still identified as Chairman of the Chettinad Group on the group's website. Born with a golden spoon in his mouth, Ramaswamy is known for his passion for horse racing and his love for the good life. The feisty 83-year-old is the largest individual owner of racing horses in India. He is supposed to own over 1,000 of them and holds the record for the most number of classic race wins (more than 500). He lives in a 10-acre palace in Chennai with an army of servants to do his bidding .
At the other end is his adopted son, M.A.M.R. Muthiah, a man whom Ramaswamy picked up from a fairly ordinary family, and who today has the group's main companies firmly under his control.
In the vicious turf battle that has ensued, Muthiah seems to have neatly edged past Ramaswamy today. The father appears to be slowly losing control over the Chettinad Group. "He may have backed the wrong horse in life," says an industrialist , who also belongs to Ramaswamys Chettiar community.
Muthiah - who has moved out to a different part of the family palace with a separate entrance - has shifted his family to Singapore where he spends considerable time but Ramaswamy now believes there is a threat to his life from his adopted son. He claimed on May 23 that goons tried to forcibly enter his part of the palace (the West Wing), smashed 90-year-old glass cases and that he feared for his life.
While differences had been festering between the two for some time, things came to a head on August 27, 2014, when Ramaswamy was removed as the Chairman of Chettinad Cements and was replaced by Muthiah's candidate. "That scar will not heal. How can I be ousted from my own company? How can I ever trust him? He was a nobody when I adopted him and opened my home and heart. This is how he has repaid," says an emotional Ramaswamy. But there is more to it than meets the eye. The Registrar of Companies, Chennai, M. Manuneethi Cholan, was arrested by the CBI on August 26 for allegedly accepting a Rs 10 lakh bribe from Ramaswamy to declare resolutions of the August 27 shareholder meeting, in which he was removed, as null and void. Cholan was subsequently suspended and the case is pending. Ramaswamy, who was also charged in the case, says it is all cooked up by his son and refuses to comment further as the case is subjudice.
It is difficult to get an exact estimate of the size of the Chettinad group today given that almost all the companies in it are privately held. A few decades ago, it was one of the most significant groups in the south, and the Chettinad family was counted as one of the richest families in Tamil Nadu. Today, after years of slow growth, the group has fallen behind, but it is still significant in size. With interests in cement, silica, hospitals, education, trading and others, the group's revenues are conservatively estimated to be in excess of Rs 5,000 crore. Chettinad Cements, Chettinad Logistics and South India Corporation are among the larger companies in the group. Apart from this, Ramaswamy's family has extensive land holdings in private capacity and in some cases through trusts. The Chettinad Palace, with the palace buildings alone located on a two-acre plot, is estimated to be worth Rs 1,800 crore to Rs 2,000 crore.
GENESIS OF THE GROUP
The group traces it origins to the S.R.M.M. family (short for Satappa Ramanatha Muttaiya) in the late 1870s. S.R.M.M. Muthiah Chettiar was a noted financier and a moneylender as well as a philanthropist and belonged to the Chettiar community. His youngest son Annamalai Chettiar started India's first private university in 1929, the Annamalai University. The family made its fortune not just in India but also Myanmar, Sri Lanka and Malaysia. The King of England conferred the title of Rajah of Chettinad on Annamalai. His son M.A. Muthiah Chettiar inherited and grew the Chettinad Group, while another son M.A. Chidambaram founded the SPIC Group after branching out on his own.
Indeed, it is hard to commute anywhere in Chennai without passing by either an educational institution, a hospital, a company or a temple not named after or started by the S.R.M.M. family. Members of this family have started institutions like the Indian Bank, United India Insurance, Indian Overseas Bank, Madura Coats, Consolidated Coffee Ltd apart from conglomerates like the Chettinad Group and the SPIC Group. It has also given the country a finance minister (P. Chidamabaram), members of Parliament, and has been a generous patron of education, sports, art and culture.
The Chettiars comprise one of the most successful business communities in India. They are also called Nagarathars, and may have a minuscule population of just 1.25 lakh but they punch above their numerical weight in terms of contribution to industry, trade and commerce. (See Chettiars - The Parsis of South India).
The Chettinad Group, started in 1902, was nurtured by Muthiah Chettiar initially and then his sons M.A.M. Muthiah and M.A.M. Ramaswamy. M.A.M. Muthiah had no children and died in 1970. In 1984, M.A.M. Ramaswamy inherited the group after his father's death.
PICKING THE WRONG HORSE?
M.A.M. Ramaswamy still has the presence to turn heads in a room because of his towering height (6 ft 2inches) and his considerable girth. He is respectfully addressed as Aiyya (equivalent to Sir in Tamil), or sometimes as 'Rajah', by his employees, community members and others.
A keen sports enthusiast, Ramaswamy was also president of the Indian Hockey Federation and under his stewardship India won its first and only World Cup Hockey championship in 1975. More than hockey, it is his passion for horse racing that has kept him in the limelight. His legendary turf rivalry with another flamboyant tycoon, Vijay Mallya of the UB Group, is also well known.
"Early on he had the image of a bit of a playboy. When he was inducted into the family business he was seen as being a reluctant industrialist who was more interested in good things of life," says another leading Chettiar industrialist about Ramaswamy, who was listed by Forbes magazine as the 88th richest Indian in 2012 with personal wealth of $650 million. "The joke within the community about his racing wins was 'if there were eight horses in a race, six would be his and the other two would be benami owned by him'. Irrespective of his obsession with horses, he had a generous heart, donated extensively to charity, was religious and gave back to society."
Ramaswamy was married at 21 to his maternal uncle's daughter, Sigapi Achi. By all accounts it was a happy marriage. However, despite his considerable wealth, he did not have any children, like his elder brother M.A.M. Muthiah. Ramaswamy was content to let professionals run his group and devoted his time to the race course and his philanthropic activities. He also became the Pro- Chancellor of Annamalai University, which was taken over by the Tamil Nadu government last year. (Ramaswamy's legal team has challenged the takeover by the government and his removal as Chancellor.)
However, pressure from relatives and community members began to mount on him to adopt and carry forward the family name. After an extensive search, and much against the opposition of immediate family members, Sigapi selected 'Iyappan', a 25-year-old. "Ramaswamy is a devout and religious person. He was swayed by the boy's name as he himself was a great devotee of Swami Ayyappa," says the anonymous Chettiar community leader quoted earlier. Ramaswamy had earlier constructed an Ayyapan temple, which even today stands opposite his Chettinad Palace.
He construed the name of the boy as a divine signal and adopted him on February 9, 1996, with his wife's backing. He renamed him M.A.M.R. Muthiah in memory of his father. Ramaswamy was 64 years old by then and his wife had already suffered a stroke. Muthiah came from a different sub-sect of the Chettiar community and his family had modest means. Still, the father and the adopted son initially got along fine. Sigapi Achi smoothed over whatever minor differences arose.
"He behaved better than what one could expect of one's own son. I called him Thambi (brother)," says Ramaswamy. In fact, Ramaswamy and his wife were so enamoured by the adopted son that they transferred a large portion of their not inconsiderable wealth to him. In 1999, Ramaswamy made Muthiah the Managing Director of his group's flagship company, Chettinad Cements. Muthiah is married to Geetha and they have three children - two daughters and one son.
Muthiah was disciplined, hard working but extremely tight fisted with money, according to the industrialist quoted earlier. He was not popular in the community and did not seek to network with the close-knit Nagarathars. "He had worked in America, had a disdain for what he thought was fuddy-duddy ways of doing business of the old generation, and wanted to bring changes," says the industrialist.
SON RISE, FATHER ECLIPSE
Muthiah failed to cultivate community members but most of them credit him with a sharp business acumen. "He is a typical Chettiar. He modernised Chettinad Cements, introducing automation, cutting costs and improving profitability, " says the Chettiar industrialist quoted earlier. This seems to have led to some friction between the father and son. While Ramaswamy was accustomed to having even second- and third- generation employees work for his family, Muthiah laid emphasis on utility and productivity and not loyalty. When automation was introduced, he culled employee numbers.
"He is a miserly fellow. Looks at everything from the point of money. Even to give a cup of coffee to somebody, he will examine whether there is any return from that person. I am unaccustomed to that," says Ramaswamy. "We have an open house, an open kitchen. Drivers of my visitors would routinely go to the canteen at the factory or the kitchen in my house where they would be served. I have a different value system."
Ramaswamy had an open hand with regard to the people who approached him for help. While Muthiah chose not to speak with BT, a source close to Muthiah says: "Aiyya doesn't realise people take advantage of him. Times have changed and he also needs to change. Even the Rajah of Chettinad title is a British creation. They never ruled over a territory. It was a title given to the family for being loyal to the British."
Things started slowly changing after Sigapi Achi's death in 2006. It was "an irreparable and unbearable loss", says a misty eyed Ramaswamy. Slowly employees who were loyal to Ramaswamy but were considered unproductive were dismissed. The palace staff was cut to 67 employees from more than 100. The headcount at Chettinad Cements, which had 1,800 to 2,000 employees at its peak, was cut by half. When these people increasingly appealed to Ramaswamy 'for help and justice', it started driving a wedge between the father and son.
The differences came out into the open when Ramaswamy was removed as the Chairman of Chettinad Cements. Ramaswamy says this was possible because he transferred the 50 per cent holding of his wife in the company to Muthiah's wife Geetha. He says security cameras were installed at the behest of Muthiah to monitor his movements and visitors.
"While all of us feel for Aiyaa [Ramaswamy] regarding what Thambi [Muthiah] did to him, there were also genuine reasons. Some old timers were using their proximity to Aiyaa to skim money off the company. Thambi only put an end to all those shenanigans. Agreed that he could have handled the matter better but he is also headstrong," says a former senior employee of Chettinad Cements.
A few Chettiar industrialists BT spoke to seem to sympathise with Ramaswamy's predicament. While they refused to be identified, given the close knit nature of this small community, one of them said: "Muthiah could have just waited for a few more years. After all his father is old. Wouldn't you indulge some of the eccentricities of an old man, especially if you could afford it? After all, it is all Aiyaa's wealth and even though Muthiah is his adopted son, he is an outsider."
Muthiah, says Ramaswamy, realises that he doesn't have support from the community - the reason why he started a community magazine about a month ago. "He never involved himself earlier in the community but now wants to network. Good luck to him. Just three of the 12 chief guests mentioned in the invitation list turned up for the launch," says Ramaswamy.
If it had been just about the sacking of some employees and servants, the Chettinad Group would not have been in trouble. But Ramaswamys allegation of a threat to his life highlights the gravity of the situation. The advocate representing him, M. Murali, dismisses all the charges. "Rajah Sir is being misled by a small coterie of palace employees and hangers-on who have vested financial interests. My client has nothing but respect towards his father. He seeks only reconciliation and good relations with him. These vested interests are taking advantage of the advanced age and ill health of Aiyaa for their own pecuniary benefits," he says. "They may do whatever they want to do in the community or at a temple, but legally my client is the son and heir to Aiyaa."
Murali claims that Muthiah even fell at his father's feet to reconcile. Another source sympathetic to Muthiah, who also did not want to be identified, says: "Even Aiyaa's brother's wife Meena Muthiah adopted a son, Annamalai. They are also not on speaking terms. This family seems to believe that just because they are rich, they can adopt or disinherit according to their whim." BT could not independently verify whether there were any differences between Meena Muthiah and her adopted son. Ramaswamy dismisses any such claim and says his sister-in-law has excellent relations with her adopted son. It is not clear what Meena Muthiah received as her share of inheritance when her husband died but according to data from the Ministry of Corporate Affairs, she has a minority stake in some group companies.
Ramaswamy's lead counsel, A. Nagarajan, says his team is examining all procedures to see whether an adopted son can be disowned legally. Nagarajan also says that the authorities should act more diligently to protect his client's interests. "While Aiyaa might have the legacy and heritage, authorities know all the wealth today is controlled by Muthiah. They will be careful in how they move."
Till the issue is resolved, the sprawling lawns of Chettinad Palace, which has witnessed many a momentous occasion (including the controversial wedding of Jayalalithaa's foster son V. Sudhakaran), will be desolate. Ramaswamy is determined, however, to fight to the finish to save "his family's name, honour and legacy".
|INTERVIEW WITH M.A.M. RAMASWAMY|
'This Is Not About Money. It Is About Trust And The Family Legacy'
He may be 83 and his knees may trouble him but M.A.M. Ramaswamy, Chairman of the Chettinad Group, has a sharp memory. In a free-wheeling conversation with Business Today, Ramaswamy, though sounding exhausted, was at times angry and at times combative as he talked about the controversy surrounding his family. Edited excerpts:
BT: You have publicly accused your (adopted) son of trying to kill you...
Ramaswamy: My wife was the best girl a man could have asked for but unfortunately we did not have children. My (elder) brother also did not have any children. From the 1990s, my wife, family members and well-wishers wanted us to adopt somebody to carry on the name of the family. We are a small and tight-knit community.
It is a fact that a number of people even within the (extended) family were opposed to him being adopted. He was from another Chettiar sub-community. Muthiah's family was not well off and he came from a small town. His father largely did menial jobs. In 1999, I made him the MD of Chettinad Cements. I gave him a lot of my wealth. Till my wife died in 2006, there was no trouble. I wasn't aware that gradually Muthiah and his (biological) father slowly and quietly built up holdings in the group without my knowledge, with an intention to oust me. On August 27, 2014, he carried out a coup against me, throwing me out as Chairman of Chettinad Cement. Imagine being thrown out of your company by a usurper.
BT: Your son's lawyer says a coterie is taking advantage of you, given your old age. Please comment.
Ramaswamy: Rubbish. I am not suffering from old age. All I have is some knee and back pain. I am completely capable of taking independent decisions on my own.
BT: While you have issued a statement saying that you have disowned him, have you done that legally?
Ramaswamy: There are two aspects. One is the religious, community part, and I have already done that. The legal part I am told is much more cumbersome and my legal team is looking into it. My wish is that I live one day longer than him. I want to see his dead body go out from here. I want to survive long. I have given up even the one small drink I used to have daily and cut my food intake by 70 per cent to ensure that.
BT: His team tells me that he has tried reconciling but to no avail...
Ramaswamy: He came and fell at my feet in a big drama. He is the biggest hypocrite I have known. He will fall at my feet only to pull me down. This is not about money or wealth. This is a question of trust, a legacy of a proud and generous family.
BT: Were there differences over your lifestyle and purchase of racing horses?
Ramaswamy: Not once. I started racing in 1960. I have more than a thousand racing horses and my horses have more than 500 classic wins. Not one horse was purchased with his money. It is all mine. My father and my brother never objected. Who is this riff-raff fellow to object to my hobbies? I even asked him once about it. He said "no, no, that is your only passion. It is your wealth".