TVS group board of directors give their nod for 'family arrangement'

The board of directors of the $8.5 billion TVS Group's holding companies have approved the so-called memorandum of family arrangement (MFA) between various members of the TVS family.

Present shareholders of the holding companies primarily consist of third and fourth generation family members of TVS Group founder T V Sundaram Iyengar.  The group currently has over 50 companies that have been traditionally managed by members of different branches of the TVS family. Over the time, various members of the TVS family felt that the ownership of shares in various businesses should align with the management of respective businesses. 

The arrangement according to the MFA is envisioned to bring about amity and maintain goodwill among members of the TVS family. Family members said this will preserve memories of TV Sundaram Iyengar.

The MFA was struck in December 2020 between family members who are shareholders of T V Sundram Iyengar & Sons Private Limited (TVSS), Sundaram Industries Private Limited (SIPL) and Southern Roadways Private Limited (SRW). The three firms are collectively referred to as the TVS holding companies.

Sources said that the composite scheme of amalgamation and arrangement to be filed with NCLT involving TVS holding companies and TVS Investments and Holdings Pvt Ltd was approved by the respective board of directors on January 30, 2021. 

The restructuring will give each family group complete ownership of businesses they manage while scrapping the holding company. According to the new terms, the family has agreed to scrap any cross-holdings. 

The restructuring will involve nine listed companies, including TVS Motor, Sundaram Clayton, Sundram Fasteners, TVS Electronics and TVS Srichakra, among others.

The family members will buy out shares of the TVS holding firms in their companies. This arrangement will not include Sundaram Finance as it is already de-linked from the holding companies.

For example, TVS holding companies presently have about 63.76 per cent in Sundaram Clayton (SCL), the holding company of TVS Motor.  According to the scheme, the shares will vest with TVS Investments and Holdings Private Limited, owned by SCL and TVS Motor chairman Venu Srinivasan and members of his immediate family.