The members of the family holding shares in various TVS Group companies will rearrange their stakes so as to "align and synchronise" with the management of the respective companies, the patriarch of the group Venu Srinivasan said in a letter.
The communication which was sent to the BSE also mentions that the letter was the fallout of the memorandum of family arrangement executed on December 10 between the members of the TVS family.
The present shareholders of the TVS Holding Companies primarily consist of the third and fourth generations of the original founder, TV Sundaram Iyengar. The various businesses/ entities of the TVS Group have been traditionally managed by members of the different branches of the TVS family.
Venu Srinivasan himself is the third-generation entrepreneur as he is the grandson of the group’s founder. His son Sudarshan Venu is the joint managing director of TVS Motor Company, the fourth largest two-wheeler maker in India.
“With the passage of time, various members of the TVS family felt that the ownership of shares in various companies/ businesses should align and synchronize with the management of the respective companies, as is currently being done. 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," Srinivasan said.
Senior nominated members of the TVS family shall now deliberate on how best to further implement this arrangement, the letter further stated.
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 & Sons, Sundaram Industries and Southern Roadways. These entities are the group’s holding companies.
The TVS Group consisting of over 50 companies has a claimed turnover of $6.5 billion and employs over 39,000. The TVS group has interests in two-wheeler and automotive component manufacturing, automotive dealerships, distribution of automotive parts, financial services, logistics services, electronics, textiles and needles. The most notable of these entities are TVS Motor Company, TVS Srichakra, Sundaram Clayton, TVS Credit and Sundaram Fasteners.
“This arrangement shall not affect the management and functioning of TVS Motor Company in any way, and we expect to continue business in ordinary course without impacting any of the stakeholders”, Srinivasan added.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.