The members of $8.5 billion TVS family on Thursday decided to restructure the ownership of various companies, a measure which would mean scrapping of the group company but does not involve payment of brand royalty to the family members or their holding companies. This would give each family in the group complete ownership of the businesses that they manage without any cross holdings.
The family members heading the group's listed companies like TVS Motor Company Ltd, TVS Srichakra Ltd, Wheels India Ltd and others, in an identical letter, have intimated the respective Company Secretaries about the family decision and these were, in turn, filed with the stock exchanges.
"With the passage of time, various members of the TVS Family felt that the ownership of shares in various companies/businesses should align and synchronise with the management of the respective companies, as is currently being done, the regulatory filing said.
"Keeping this objective in mind, the members of the TVS Family have today agreed to subscribe to the terms of a memorandum of family arrangement in order to record the terms of the family arrangement so agreed upon," the filing added.
According to reports, this family agreement will mean that the existing managements of the group businesses will continue to be managed by the same family members. This means that Suresh Krishna and his daughters will manage Sundaram Fasteners. TVS Motors will be managed by Venu Srinivasan and his family along with TVS Credit, Sundaram Clayton, and a few other companies. R Dinesh will manage TVS Logistics and TVS Automobile Solutions, among others, while TVS Srichakra will be managed by Shobhana Ramachandran.
Senior nominated members of the family shall now deliberate on how best to further implement this arrangement.
According to the TVS family, the new arrangement shall not affect the management and functioning of the companies in any way, and they expect to continue business in ordinary course without impacting any of the stakeholders.
"Furthermore, the terms of the family arrangement do not envisage any royalty or brand usage payments from the operating businesses/companies to the TVS family members/their holding companies," the filing states.
The present shareholders of the TVS Holding Companies primarily consist of the third and fourth generations of the original founder, T.V. Sundaram Iyengar. The various businesses/entities of the TVS Group have been traditionally managed by members of the different branches of the family.
The TVS family has been engaged, for more than a century, in a diverse range of businesses through various entities in which the branches of the TVS Family have invested in or through T.V. Sundram Iyengar and Sons Private Ltd, Sundaram Industries Private Ltd and Southern Roadways Private Ltd - collectively known as TVS Holding Companies.
Over the decades, the TVS family has expanded their businesses and the TVS Group has grown into a large business conglomerate with interests in several businesses operating in diversified fields, including two-wheeler and automotive component manufacturing, automotive dealerships, distribution of automotive parts, financial services, logistics services, electronics, textiles and needles.