The 130-year Kirloskar Group is headed for yet another split as the Pune-based Kirloskar brothers are in the midst of a bitter fight with Atul and Rahul on one side and Sanjay on the other.
The Kirloskar family dispute has seen the three Kirloskar brothers trading charges and taking their fight to the NCLT, Sebi and courts. The grandsons of SL Kirloskar and fourth-generation Kirloskars — Sanjay Kirloskar, Atul Kirloskar and Rahul Kirloskar — are in the midst of these battles. Sebi is investigating insider-trading charges by Atul and Rahul.
The 130-year Kirloskar Group is headed for yet another split as the Pune-based Kirloskar brothers are in the midst of a bitter fight with Atul and Rahul on one side and Sanjay on the other. Attempts made to end the battle through mediation by former finance secretary Vijay Kelkar failed. Appeals to preserve the Kirloskar legacy and resolve the disputes privately failed.
Atul and Rahul have filed a case at the NCLT against Sanjay and sought his removal from KBL claiming mismanagement and oppression. KBL has indicated that Sebi is investigating whether Atul and Rahul were involved in insider trading while being part of the KBL leadership team. Meanwhile KBL’s independent probe into charges of insider trading against Atul and Rahul by justice (Retd) BN Srikrishna has been made public, which says that Atul and Rahul could be held guilty of insider trading.
Another bone of contention is the fight over the ‘Kirloskar’ trademark. Fight for the Kirloskar home in upscale Pune has reached the police station and there is also vast land holdings of the Kirloskar family in the outskirts of Pune. There are charges of failure in honouring the family agreement of not getting into each other’s business. The battle has also reached their management school, Kirloskar Institute of Advance Management Studies.
The Kirloskar Group had first split in 2000 when Bengaluru-based Vijay Kirloskar moved out of the group with Kirloskar Electrical while the Pune-based Kirloskar brothers moved out with Kirloskar Oil Engine Engines, Kirloskar Brothers, Kirloskar Pneumaics and related subsidiaries.
The Kirloskar Group business was restructured and split between the brothers again in 2008-09 after a family settlement. Sanjay Kirloskar is running Kirloskar Brothers (KBL) while Atul Kirloskar and Rahul Kirloskar managed Kirloskar Oil Engines (KOEL), Kirloskar Pneumatic Company (KPCL), respectively. Companies were created to house investments and become holding companies to deal with the complex cross holdings in the Group.
KBL is the most successful of the Kirloskar companies paying dividend for 81 years and is among the leaders in the pumps business with an annual turnover of `3,000 crore. KOEL acquired a majority stake in La-Gajjar Machineries, marking their entry into the pumps business, which led to the escalation of the battle as there are differences in the interpretation of the non-compete clause in the Deed for Family Settlement. KOEL has just got permission from the RBI to start an NBFC and an insider-trading charge would hurt their credibility.
Sanjay Kirloskar has refrained from commenting as these matters were sub-juidce while there was no response from office of Atul and Rahul Kirloskar.