HEADLINES:
June 19 2019
Rift between Kirloskar brothers comes out in open
30 October 2018

Rahul, Atul move tribunal to oust Sanjay as CMD of KBL

Kirloskar brothers Rahul and Atul have approached the Mumbai Bench of the National Company Law Tribunal (NCLT) to oust sibling Sanjay Kirloskar as chairman and managing director of Kirloskar Brothers Ltd. (KBL), alleging oppression and mismanagement.

Settlement deed

This, despite the fact that the Kirloskar family, which controls the 130-year-old Kirloskar Group, being a signatory to a deed of family settlement (DFS) for distributing the assets in the form of shares of various companies in the Kirloskar Group and cash held in trusts and investment companies.

The NCLT listed the matter for hearing on December 17. Kirloskar Industries Ltd., Rahul Kirloskar and Atul Kirloskar have filed a petition against Kirloskar Brothers Ltd., Sanjay Kirloskar, Pratima Sanjay Kirloskar and other board members of the Pune-based firm for removal of the chairman along with the current board members and have sought the appointment of their own nominees on the board.

According to the petition, Mr. Sanjay Kirloskar has been increasing his shareholding in the company, while its board has been arbitrarily rejecting their pre-clearance request for selling or buying shares by falsely citing the DFS.

The DFS entered in 2009 was to ensure that there was no dispute among future generations and that the family continued its business in a united manner.

“[The board is] coercing petitioner No. 2 [Rahul] to only sell the shares to respondent No. 2 [Sanjay] under the false pretext of deed of family settlement (DFS),” the petition said, adding that the board was permitting Mr. Sanjay to freely increase his share in Kirloskar Brothers, but arbitrarily rejecting the pre-clearance applications of Mr. Rahul to buy shares at the stock exchange.

KBL’s code of conduct for promoters and other key management personnel requires them to take the board’s clearance before buying or selling the company’s shares. However, according to the petition, there is no covenant or provision in the DFS restricting the rights of any person from buying or selling shares in accordance with the law.

 

 

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