Chettinad group's offices in TN, Andhra, Mumbai raided by I-T
Offices of the Chettinad group were raided by Income Tax officials on Wednesday morning, adding a fresh twist to a family feud in one of southern India's oldest and influential business families.business Updated: Jun 10, 2015 14:18 IST
Offices of the Chettinad group were raided by Income Tax officials on Wednesday morning, adding a fresh twist to a family feud in one of southern India's oldest and influential business families.
About 50 teams of Income Tax officials started the raids at 8am at the offices of the group in Tamil Nadu and two other states. Of the 39 offices being raided, 35 are in Tamil Nadu and two each in Andhra Pradesh and Mumbai.
The raids came a day after former Chettinad group chairman MAM Ramaswamy alleged that Chettinad Cements, run by his adopted son MAMR Muthaiah (Ayyappan), owed a huge amount of taxes over the past several years.
Following this, a complaint was lodged regarding tax payments by the group, sources said. The Chettinad group has interests in cement, education and healthcare.
Ramaswamy has publicly disowned his adopted son for grabbing a substantial part of the family property and companies.
The decaying Chettinad business empire has been the subject of an intense inheritance battle that has seen Ayyappan initiate several rounds of litigation against his adoptive father.
Ramaswamy hails from the ‘Rajah family’ of the Nagarathar community. His grandfather Rajah Sir Annamalai Chettiar, father Rajah Sir MA Muthiah Chettiar and uncles MAM Ramanathan Chettiar and MA Chidambaram Chettiar assiduously built the once flourishing empire.
The family is said to have owned 100,000 acres of paddy land and 100 branches of the Bank of Chettinad in Myanmar (then Burma) and properties in Singapore, Malaysia, Indonesia, Vietnam and Sri Lanka. It was a major shareholder in Indian Bank and had a 50:50 partnership with the Harvey family of Scotland in running the famous Madural Mills, apart from owning interests in construction and port businesses.
Chettinad Palace, now estimated to be worth up to Rs 3,500 crore, hosted the Duke of Edinburgh in its heyday.
In a press conference at his palatial Chettinad House on Tuesday, Ramaswamy, flanked by a lawyer and his industrialist and former cricket administrator cousin AC Muthaiah, said of his adopted son: “I have disowned him and do not wish to call him my son. He shall not perform any ceremonies or obsequies on my demise.”
MAMR Muthaiah, whose original name was Ayyappan, was adopted by Ramaswamy in the mid-1990s, apparently against the advice of community elders.
“I trusted him, but he clandestinely with an ulterior motive transferred a substantial part of our properties and powers in business and also forced me to make him the managing director of Chettinad Cement Corporation. He also pressured me to induct him and his wife Geetha Ayyappan in various trusts and societies,” the octogenarian industrialist said.
“I am a nobody in Chettinad Cements now,” he said, alleging that his adopted son was defrauding shareholders by diverting company funds to his family.
While speaking to Hindustan Times, Ayyappan would only say that Ramaswamy’s tirade was born of frustration. He has claimed in the past that his adoptive father had gone senile and was more interested in horses than businesses.
“I have built Chettinad Cements to what it is. Its market capitalisation of Rs 60 crore when I took over two decades ago has now gone up to Rs 4,000 crore,” he said.