Alagappan to take over as Murugappa board chairman

CHENNAI: A senior family member of the $1.6-bn Murugappa group is set to regain the chairman’s post of Murugappa corporate board after a gap of five years. The group announced on Friday that MA Alagappan, vice-chairman of the corporate board, has been nominated as the next chairman of the board. He will succeed PS Pai, who has been the chairman of the board since October 21, ’02.

In 1999, the group initiated the process of transforming the family-owned business into a professionally managed group. The family members opted for a new governance structure and formed MCB as an internal group. As part of this, MV Subbiah resigned as chairman of MCB.

In his place, NS Raghavan, former joint MD, Infosys, became its first external chairman in April ’01 when the group had a turnover of Rs 3,900 crore. Then, in October ’01, PS Pai, former vice-chairman of Wipro, was appointed for a period of three years.

Mr Pai’s extended period of one year is due to expire on October 20, ’06. He is proceeding on leave from Monday, September 18, as a preparatory to retirement. Meantime, the senior executives’ meeting, to determine the long term strategy of the group is scheduled on September 22 and 23.

A group press release said, Mr Pai felt that this event should be overseen and orchestrated by the new chairman. He is, therefore, handing over operational charge to MA Alagappan, who is now 62. Son of late AMM Arunchalam, Mr Alagappan has been associated with the group from his early age.

He has been a dynamic business manager with strong entrepreneurial traits. He is an active director not the boards of several companies of the group. Currently, he is the executive chairman of Tube Investments of India and chairman of Cholamandalam Investment and Cholamandalam MS General insurance.

Commenting on the development, Mr Alagappan told ET, “I feel my priority will be continue the strong foundation laid by Pai. He played a major role in motivating and guiding the younger generation and managers. He also played a key role to craft a succession plan at the family and professional levels”.

Mr Alagappan felt he has a challenging role ahead. In the last three or four years, the group companies are doing well and making good profits. The group has large businesses like sugar, fertiliser, cycles, steel tubes.

It also has major interests in insurance, HP finance, mutual funds and other financial services. He said, “ while we have large businesses, we have to be more competitive within the country since global players have entered India”.