The history behind the feud ripping apart Chettinads first family
news Chettinad Wars Friday, June 12, 2015 - 05:30

The month of June has been uncharacteristically busy for business reporters in Chennai. Members of one of South India’s largest, oldest and most valuable family-held business groups washed their dirty linen out in the open. A father-son faceoff turned full-fledged family drama evinced interests not just among the business classes, but even the average person on the street thanks to the wide reach of the Chettinad family through their philanthropy.

Much has been reported about the feud between MAM Ramaswamy, grandson of Raja Sir Annamalai Chettiar, and Ramaswamy’s adopted son MAMR Muthiah, formerly Ayyappan. But several questions remain unanswered. Many following the recent events are asking, what is the real reason behind this feud? Is there someone else behind this public showdown? Here is the simpler version of what is happening.

MAMR Ramaswamy, Chairman Emeritus of the Chettinad Group who has no active role in the group’s business operations but takes immense interest in the philanthropy of family trusts, is fighting with his adopted son MAMR Muthiah, the business head of Chettinad group. The fight is over some non-business assets of the group which were under family trusts, including the palaces, huge land banks and philanthropic institutions. The father has now disowned the adopted-son. He has started the legal process of annulling the adoption and creating two trusts to secure the assets which are not a part of the business arm. The two new trusts will be chaired by Ramaswamy’s cousin, AC Muthiah.

The combined wealth of the business and nonprofit assets of the Chettinad group is believed to run in to several thousand crore rupees. An observer who has been following the Chettinad Group for several years says that to understand the present tussle, one has to understand two characteristics of the Chettinad family. They are tight-fisted when it comes to business, but very generous with charity. Raja Annamalai Chettiar was known to be a person who could donate several acres of land without much ado, but could even admonish an employee over a few rupees. MAM Ramaswamy is easy with his charity. He is known to be traditional in his approach, and still believes in the feudal structures.  He loves his horses, and takes pride in having run the various educational institutions, most importantly the Annamalai University which was taken over by the Tamil Nadu government in 2013. MAMR Muthiah is a sharp, astute businessman. He runs the group with an iron-fist and is known to have good business acumen. He does not like anyone interfering in his business, and credits himself with bringing the up value of Chettinad Group from Rs 60 crore when he took over in the 1990s to Rs 4000 crore now. MAMR Muthiah at a CII event In 1996, Ramaswamy decided to adopt a son to take over the business and take care of him in his old age.

The adoption was not without controversy. The ‘Nagrathars’, the community of Chettiars, is divided into seven sects following different temples. The rules of adoption of the community state that a family can adopt a child from the same temple-sect. Ramaswamy went against the Chettiar community and adopted a son from another sect. On adoption, Ayyapan became MAMR Muthiah. Today, Ramaswamy is quoting the same violation to disown him, he says he never adopted him under the community rules so he can disown him. “Whatever the law may be, he is no more my son. According to me, he can only be S Ayyapan and not MAMR Muthiah,” he said at a press conference recently.

Ramaswamy says that his son MAMR Muthiah has betrayed him. According to Ramaswamy, the reason he wants to sever the relationship with his adopted-son is because he is stingy about spending on philanthropy, which has been the pride of the family. He says that his son wants to take over the entire wealth of the family and does not live up to family rituals. Ramaswamy also says that Chettinad Hospitals, which is under the control of MAMR Muthiah, used to send him medicines for several years but have now stopped doing so for the past three months. MAMR Muthiah defends some of his actions. Those close to him say that he believes that one cannot do charity from others’ pockets, so the business arm of the group should not be forced to spend money on charity. Chettinad Cements, for example, is a company with other shareholders. “Is it fair for Chettinad Cements to pay the salaries of employees of the palace?” asks an observer.

Muthiah also reportedly believes that Ramaswamy only indulges in charity for people around him, and not for the larger society or community.  He has also said openly that the business comes first, and that he will not allow anything which harms the company’s interest. Some believe that the trouble between the father and son is rooted in the takeover of Annamalai University by Tamil Nadu government in 2013. For Ramaswamy, it was the crown jewel of his public life. Having been stripped off it, Ramaswamy felt that he needed to do something else to remain relevant. There was another blow in 2014. At a shareholders’ meeting in Chennai, Ramaswamy was eased out of the board by shareholders, denying him the post of Chairman of the Chettinad Cement Corporation. A day before the meeting, the CBI had arrested the Registrar of Companies in Chennai for allegedly taking a bribe from Ramaswamy for declaring the meeting null and void. Ramaswamy is known to have been miffed, checked himself into a hospital later that evening and denied the post of the Chairman Emeritus which was offered to him. The trouble reached a flashpoint recently when several men close to Ramaswamy were arrested for trying to attack Muthiah. Now, on the basis of another complaint by Ramaswamy, similar cases have been filed against Muthiah and his men. At a press conference recently, MAMR Muthiah said that he is willing to accept any decision of his father as far as it was constructive for the business.  He also said that “five-seven people” including a “family member” have poisoned his father’s mind to take over the estate.

So who is this family member? At the press conference held by Ramaswamy, AC Muthiah sat beside him all along, complimenting what Ramaswamy said and helping him out with talking points. It has also been reported that AC Muthiah said that MAMR Muthiah ‘hijacked’ Chettinad Cements. Apparently, AC Muthiah had been approached by MAMR Muthiah to mediate between the father and the son, but AC Muthiah refused. Today, AC Muthiah will be chairing the two mammoth trusts which will hold the non-business assets of the group, running into several thousand crore rupees.

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