Kirloskar Industries Ltd (KIL) has filed a fresh affidavit before the National Company Law Tribunal (NCLT) against Kirloskar Brothers Ltd, disputing statements made by the latter in a recent affidavit regarding a six-year-old case between the factions.
The matter will be heard by the NCLT on Monday. The fresh affidavit filed by Kirloskar Industries was in response to a recent affidavit by Kirloskar Brothers, regarding KIL’s willingness to resolve the dispute. Mint has seen a copy of KIL's affidavit.
Kirloskar Industries is controlled by younger brothers Atul and Rahul Kirloskar, while Kirloskar Brothers Ltd is majority owned by Sanjay Kirloskar. Kirloskar Industries owns a 23.91% stake in Kirloskar Brothers, while Atul and Rahul Kirloskar own 0.59% and 0.51%, respectively.
In 2017, Atul and Rahul Kirloskar filed a petition before the NCLT alleging “oppression and mismanagement" by Sanjay Kirloskar. The duo pleaded for the removal of Sanjay Kirloskar owing to “oppressive acts and mismanagement of the company" against the interests of minority shareholders.
The petition detailed those alleged “oppressive acts" committed by the management of Kirloskar Brothers upon the minority shareholders of the company and pleaded that the board is made accountable. In the course of the pleadings, it also alleged that funds belonging to Kirloskar Brothers have been misused to pay for family disputes.
The matter has been languishing before the tribunal for over six years now.
“In a last-ditch attempt to resolve the disputes, Kirloskar Industries was willing to either sell their entire shareholding in Kirloskar Brothers or buy the same from the warring brother or in the alternate, the duo was ready to the proposition that one party may quote a price and the other party exercises the option to choose either to buy or sell at that price," said the fresh affidavit by Kirloskar Industries.
The fresh affidavit by KIL added that Sanjay Kirloskar had filed an additional affidavit in December 2023 before the NCLT. “It is shocking to note that by way of additional affidavit, Sanjay Kirloskar has brought on record, matters that are completely unrelated and unconnected to the petition, simply with the intent to avoid responding to the buy/sell offer," said the KIL affidavit cited above.
While hearing the matter in October 2023, the tribunal led by justices Virendrasingh Bisht and Prabhat Kumar suggested the two parties explore options to resolve the dispute. However, the court said it was not inclined to get into the merits of the matter.
Meanwhile, some public minority shareholders are also keenly watching the developments and have written to the management of both the companies – Kirloskar Industries and Kirloskar Brothers – encouraging them to consider the buy/sell option, a legal expert aware of the matter said on condition of anonymity.
Emails sent to both the companies remained unanswered.
The minority investors believe, said the legal expert, that the buy/sell option may bring an end to this longstanding dispute as three warring brothers in control of a company only affects the large number of public shareholders.
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Published: 14 Jan 2024, 05:08 PM IST
Kirloskar Industries files fresh affidavit against Kirloskar Brothers | Mint - Mint
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