Family-owned TVS group restructures ownership model; Scraps holding company structure
The $8.5 billion, Chennai-based TVS Group has decided to start a restructuring to give complete ownership of the companies they managed to each family member.
The $8.5 billion, Chennai-based TVS Group has decided to start a restructuring to give complete ownership of the companies they managed to each family member. There won't be any cross-holdings, the family has agreed, according to the new terms.
According to a stock exchange filing by the group on Thursday, the new arrangement will not affect the management and functioning of the company in any way, and business would continue without impacting any of the stakeholders.
The filing said, "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. Senior nominated members of the TVS Family shall now deliberate on how best to further implement this arrangement."
The TVS brand will be allotted to each family group for their use in their lines of business on a perpetual, royalty-free basis. Structure of TVS Group after the restructuring:
Suresh Krishna and his daughters will manage Sundaram Fasteners.
Venu Srinivasan and his family will manage TVS Motor, TVS Credit, Sundaram Clayton, and some other companies.
R Dinesh will manage TVS Logistics and TVS Automobile Solutions, among other firms.
Shobhana Ramachandran will manage TVS Srichakra.
The existing management of the listed and unlisted companies in the group will continue.
The TVS group consists of businesses started by founder T V Sundaram Iyengar. 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 Sundaram Iyengar & Sons, Sundaram Industries, and Southern Roadways Private Limited (collectively referred to as the 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.
The present shareholders of the TVS Holding Companies primarily consist of the third and fourth generations of T V Sundaram Iyengar. The various businesses of the group have been traditionally managed by members of the different branches of the TVS family.
The family felt that the ownership of shares in various companies should align and synchronise with the management of the respective companies and, therefore, the memorandum of family arrangement has been entered into.
The TVS Group comprises over 50 companies and has a total workforce of close to 39,000 employees. They operate in a range of fields like two-wheeler and automotive component manufacturing to automotive dealerships, finance, and electronics. T V Sundaram Iyengar & Sons was set up in 1911.