The Kirloskar family battle between the three Kirloskar siblings is set to escalate with Kirloskar Oil Engines (KOEL) seeking a shareholder’s nod to enter all segments of the pumps business. The special resolution for entering all segments of the pumps business will be put to vote at the KOEL annual general meeting on August 11.
KOEL is seeking shareholder nod to amend the objects of business in the memorandum of association (MoA). In the AGM notice issued by KOEL, the company is seeking shareholder approval for passing a Special Resolution for altering the existing Clause III(A)-Main Objects Clause of KOEL’s MoA . This amendment to the MoAs seeks to broaden the object of KOEL’s business activities and engage in the business of manufacturing, developing, selling, distributing and dealing in ‘all types of pump sets and pumps for agricultural, industrial, commercial, residential, or any other usage’.
KOEL, which has been in the engines and power genset business made an entry into the pumps business through the 2017 acquisition of submersible and mono-block pumps maker La-Gajjar Machineries.
Pumps are the core business of KBL with its presence in the entire range of pumps from agri to nuclear power pumps. KBL has maintained that as per the family agreement this was not allowed as there is a non-compete clause in the family agreement.
The Kirloskar family `Deed for Family Settlement’ was signed by promoter family members, Sanjay (KBL) Atul and Rahul Kirloskar (KOEL and Kirloskar Industries).
Kirloskar Brothers chairman and MD Sanjay Kirloskar recently disclosed details of the family settlement in a stock exchange filing. KBL said these disclosures were made as per Sebi’s LODR requirements, where promoters have to disclose to exchanges their family settlement agreements or arrangements that have a bearing or influence on management control of listed entities.
A KOEL shareholder has written to the company expressing concern about the changes in the main objects clause which could lead to litigation.
The shareholder holding shares in KOEL, KBL and KIL, said the proposed clause would be in direct conflict with the deed for family settlement, as disclosed by Kirloskar Brothers. The shareholder has urged the companies to ensure that disputes of promoters should not erode the wealth of our company.