Kirloskar Industries Ltd (KIL) along with Atul Kirloskar and Rahul Kirloskar, who together hold 24.92 per cent in Kirloskar Brothers Ltd (KBL), have been involved in a fight against KBL Chairman and Managing Director Sanjay Kirloskar following a family dispute.
Kirloskar Industries Ltd on Thursday said an order passed by the National Company Law Tribunal has reinforced the allegations regarding mismanagement of Kirloskar Brothers Ltd, confirming the lack of independence of the board of directors of the company.
Kirloskar Industries Ltd (KIL) along with Atul Kirloskar and Rahul Kirloskar, who together hold 24.92 per cent in Kirloskar Brothers Ltd (KBL), have been involved in a fight against KBL Chairman and Managing Director Sanjay Kirloskar following a family dispute.
The National Company Law Tribunal (NCLT) has in its order passed on May 21, 2024, held that the affairs of KBL are being mismanaged and are not being conducted in a transparent and independent manner, a spokesperson of KIL said in a statement.
The order confirms that a case of oppression and mismanagement under Section 241 and 242 of the Companies Act has been made out by KIL and other petitioners, against KBL, its Board of Directors and Pratima Kirloskar (wife of Sanjay Kirloskar), the statement added.
"The Tribunal has further held that the affairs of KBL are influenced and coloured by the aspirations of Sanjay Kirloskar and his family members in running the affairs of KBL as per their desires and without any interference (from any other shareholder)," it said, adding this has impacted the decisions of the board of directors of KBL and its compliance officer and its participation in legal proceedings.
The spokesperson said, "These findings reinforce the allegations of the petitioners regarding mismanagement of KBL and confirm the lack of independence of the Board of Directors of KBL. This also once again raises questions on the huge legal expenses being incurred by KBL to fight the personal battles of its Chairman and Managing Director Sanjay Kirloskar."
Comments from KBL could not be immediately obtained.
Further, the spokesperson said, "The Tribunal has also rejected the claims made by Sanjay Kirloskar and his family that pursuant to the DFS (Deed of Family Settlement), he and his family has exclusive ownership and control over KBL and has categorically opined that the Tribunal did not find any clause in the DFS giving exclusive ownership to any one party."
NCLT has observed that shares of KBL were allotted to members of the Kirloskar family to equalise the wealth of the factions of the Kirloskar family, which the petitioners are entitled to monetise in the manner they wish, the statement said.
"The Tribunal has categorically rejected the argument that restrictions on transferring or dealing with shares are implied in the DFS and held that the DFS is a full-fledged agreement setting out detailed clauses which should be considered as mandated by law including the Indian Evidence Act," it added.
The Kirloskar siblings, with Sanjay on one side and Atul and Rahul on the other, have been in a feud since 2016 over the deed of family settlement for the assets of the more than 130-year-old Kirloskar group. Rahul Kirloskar is the executive chairman of Kirloskar Pneumatic Co Ltd, Atul Kirloskar is the executive chairman of Kirloskar Oil Engines Ltd.