A 2020 settlement split the 115-year-old TVS industrial group among sons of founder T.V. Sundaram Iyengar.
Personal differences over ownership within the family are now surfacing with his children Lakshmi Venu and Venu Sudarshan on opposite sides. Srinivasan is the grandson of Iyengar and chairs bikemaker TVS Motors and associated companies.
More than two years after Srinivasan’s family, referred to as the VS branch, agreed to split the TVS brand among the next generation, his daughter, Lakshmi, is seeking “a fair settlement” with her younger brother, Sudarshan, according to an executive familiar with the matter.
“TVS family had a partition of the joint family in 2020. Subsequent to which the VS branch controls TVS Holdings, TVS Motors, TVS Credits and SCL among other entities,” the executive said. “Lakshmi has every right equal to that of Sudarshan under the law of the land.”
The executive said no division or agreement has happened within the VS branch, and that Lakshmi’s mother, Mallika Srinivasan, is trying to arrange an “amicable settlement” through talks.
The 20 March 2024 memorandum of understanding, signed by Srinivasan, Mallika, Lakshmi and Sudarshan, explained who could use the TVS name for which businesses. The executive said it did not settle who owns what.
“The 2024 MoU is only about the use of brand rights and a non-compete and does not include any financial settlement,” the executive said. “Running a business does not give exclusive ownership or remove the financial rights of other family members.”
The Economic Times reported on the differences in the TVS business family in its edition Friday morning.
Missing clarity
Lakshmi has repeatedly asked for information, openness, and talks, the executive said. “Sadly, these efforts have been met with silence and sometimes threats instead of helpful discussion. It is unfortunate that in an educated and modern India, unfair treatment based on gender is still strong enough to deny a daughter her rightful settlement according to the laws.”
Under Hindu succession law, a daughter has the same rights as a son, a point the executive close to Lakshmi said.
However, the executive is hopeful that, in this case, the matriarch Mallika Srinivasan will try to resolve the differences amicably between her two children.
Venu Srinivasan and Mallika Srinivasan did not immediately answer queries sent by Mint.
A family resolution for Venu Srinivasan comes as he has emerged as a key player in the house of Tatas, the country’s largest conglomerate. His backing of Tata Sons Chairman N Chandrasekaran for a third five-year term and his endorsement of taking the Group company public is at the centre of a tussle with most of the Tata Trustees, including chairman .
A reversal in 72 hours
The rift with the Sudarshan side surfaced publicly in March at Sundaram-Clayton Ltd, the listed die-casting company Lakshmi runs.
Lakshmi, its managing director, objected to the continuation of company secretary, P.D. Dev Kishan, for two reasons: he was not a full-time employee of Sundaram-Clayton and he reported to Gopala Desikan, the finance chief of TVS Holdings, instead of to her.
The board accepted Kishan’s resignation, saying it was for “personal reasons”. Just 72 hours later, in a communique to stock exchanges, the company said that the board had changed its mind. Venu Srinivasan, who had stepped back to become chairman emeritus, returned as chairman and managing director of the company.
This change revisited a group reorganisation in 2023.
The understanding
On 11 August 2023, Lakshmi stepped down as managing director and director of TVS Holdings, the main owner of , and Venu Srinivasan became its non-executive chairman. Lakshmi then became managing director of Sundaram-Clayton, with her father as chairman emeritus.
Since then, Lakshmi has managed the die-casting business while Sudarshan has managed the holding company that controls TVS Motor. At , Srinivasan is chairman emeritus and Sudarshan is chairman and managing director.
The 2024 memorandum of understanding, a copy of which has been reviewed, records that Venu Srinivasan and Sudarshan control the TVS Holdings businesses: automobiles, financial services, real estate and drones. Srinivasan and Lakshmi control Sundaram-Clayton. Mallika and Lakshmi control Tractors and Farm Equipment Ltd (TAFE). Only Venu Srinivasan sits on both sides.
Sudarshan may not use “TVS,” “Sundaram” or “Sundram” for die-casting, as per the MoU, where his father and Lakshmi have exclusive rights. Mallika and Lakshmi may not use those names for the TVS Holdings businesses. The rights cannot be changed and the agreement lasts forever.
For ten years, Srinivasan and Sudarshan may not enter the tractor business, and Sudarshan may not enter die-casting or own shares or voting rights in companies in either business. Mallika and Lakshmi have the same limits in the auto business. Drones as a business are open to everyone. Each side must follow the rules only as long as the other side does. The MoU defines “control” as owning at least 26% of shares or voting rights.
The Sundaram Clayton episode crossed that line.
Under the MoU, Lakshmi and her father control the company and Sudarshan has no stake in its business, yet its company secretary reported to the finance chief of the holding company the brother ran.
Who holds the shares?
The family owns 59.09% of Sundaram-Clayton. VS Trust, with Venu Srinivasan as sole trustee, owns 46.83%, while a family branch owns 6.87% through TSF Investments Ltd. Srinivasan holds 4.38% personally, and Mallika and Lakshmi own 0.26% and 0.75%.
TVS Holdings owns 56% of TVS Motor. The family holds 74.45% of TVS Holdings: VS Trust owns 66.55%, Srinivasan Trust (with VS Trustee Private Ltd as trustee) owns 3.07%, and the family branch owns 3.74% through TSF Investments. Mallika and Lakshmi own 0.29% and 0.82%.
As the only trustee of VS Trust, Srinivasan controls the voting power in both companies. Lakshmi may manage Sundaram-Clayton, but her direct share in it is under 1%.
TVS Holdings Ltd had a market cap of ₹23,202 crore at the end of Thursday, while TVS Motor was valued at ₹1,83,384 crore and Sundaram Clayton ₹2,431 crore. TVS Credit Services Ltd is privately held.