A buyback agreement signed 30 years ago is the only deal between the Hiremaths and Kalyani Group, and the alleged family arrangement of 1994 was “merely a note” by Baba Kalyani’s father Neelkanth Kalyani. Further, the lawsuit by the Hiremaths is to prevent Kalyani Group firms from acquiring further shares in Hikal, according to the affidavit filed by industrialist Baba Kalyani.
In a limited affidavit that was filed as a reply, Baba Kalyani also stated that Hiremaths’ lawsuit was based on “wrong and false” claims and it should be dismissed. Further, it also raised questions on why the Hiremaths had not raised any dispute in the past three decades.
Replying to the suit by Jaidev Hiremath and Sugandha Hiremath (Baba Kalyani’s sister), promoters of specialty chemical firm Hikal, the affidavit said that “unsigned family arrangement of 1994” was just a note. It did not reflect the true understanding pertaining to Hikal shares.
No agreement was reached in 1994 regarding the transfer of shares of Hikal to the Hiremaths at all, it said, adding, Kalyani Group and Hiremaths were to be always co-promoters of Hikal.
In their filing in March before the Bombay High Court, the Hiremaths had sought reliefs, including transfer of shares held by the Kalyani Group’s public listed entities in Hikal, to her. The suit was filed against Bharat Forge CMD Baba Kalyani and Kalyani Group companies (BNK Group) also sought “performance obligations” under an alleged family arrangement.
The suit seeks to prevent the two listed companies – Kalyani Investment Company (KICL) and BF Investment (BFIL) of the Kalyani Group – from acquiring further shares in Hikal, the limited affidavit said. None of the documents – buyback agreement, correspondences or ‘family arrangement’ – mentions anything of shareholding transfers.
The note by Neelkanth Kalyani did not reflect the true understanding pertaining to Hikal shares. No agreement, claimed Kalyani, was reached in 1994 regarding the transfer of shares of Hikal to the Hiremaths.
Hiremath’s suit seeks to prevent the two listed companies – Kalyani Investment Company (KICL) and BF Investment (BFIL) of the Kalyani Group – from acquiring further shares in Hikal through a “wrong and false” claim.
The only obligation in terms of the shares of Hikal was a buyback agreement executed in January 1992, which was fully given effect to in 1994, and was confirmed later in a letter in 1997. It also cited that the Hiremaths never raised any objections, nor any claims arising from a “supposed”, “unsigned” family arrangement entered into in 1994, he said in the affidavit.
By not raising any claims, Hiremaths had accepted that entities of the Kalyani group rightfully held shares in Hikal, it said.
Hikal was incorporated in 1988, and group company Kalyani Steels had provided a series of loans to Hikal till 1991, post which the debt was converted into equity. It brought Hikal into the Kalyani Group’s control, making it a wholly-owned subsidiary.