The Kirloskar family saga has taken an ugly turn. The chairman and managing director of Kirloskar Brothers Ltd (KBL) has sued several members of his family for not adhering to the Deed of Family Settlement. He has moved Pune civil court seeking damages to the tune of Rs 750 crore from his brothers Atul, Rahul, cousin Vikram and late cousin Gautam Kulkarni’s family.
The crux of the suit filed against several members of the Kirloskar clan is that some of them have ventured into the same business as Sanjay Kirloskar and hence violated the “family settlement” arrived at in September 2009.
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Tuesday 05 Nov. 2024
“Under the aegis of Shri Shantanu Laxmanrao Kirloskar (grandfather), the Kirloskar Group Companies were operated and promoted with the intention and tradition of ensuring that the businesses carried on by the companies were controlled and managed with the Kirloskar family and were also demarcated between different branches of the Kirloskar family. The businesses of Kirloskar group companies were to be complimentary and not competitive inter se i.e. with each other/ members of Kirloskar group companies, in the greater interest of Kirloskar group,” it states.
According to the suit, before his passing in 1989, Shantanu Kirloskar executed a will confirming that ‘control of each individual Kirloskar group company remained within the branch managing that company’.
The settlement signed by several members – including Atul, Rahul, Vikram and Gautam Kulkarni – reiterated the non-competing clause, according to the suit. Sanjay Kirloskar claims that after the settlement, he did his part by giving Rs 80.50 crore to Vikram and gifting shares of Kirloskar Brothers Investments Ltd ‘worth hundreds of crores’ to Atul, Rahul and Gautam. The suit states that by gifting shares, he effectively handed over control of Kirloskar Oil Engines Ltd (KOEL) and Kirloskar Pneumatic Ltd (KPL) to his brothers and cousin.
The suit claims that his brothers, however, have gone against the settlement. Sanjay Kirloskar has cited case of KOEL, controlled by his brothers and late Gautam Kulkarni, venturing into business of trading in electric mono-block and submersible pumps branded as ‘Varsha’, an arena in which his company KBL is a leader. After Sanjay brought the noncompetition clause to their notice, KOEL stopped trading in the pumps, the suit states.
However, “on June 21, 2017, the plaintiffs (Sanjay and KBL) were shocked to learn by way of a press release that KOEL had acquired 76 per cent stake in La-Gajjar Machineries Pvt Ltd, a company engaged in manufacturing and selling of electric submersible and mono-block pumps and pump-sets (a business, which is in direct competition with KBL), and were trying to sell the said pumps in the market,” the suit states.
The suit states that this ‘smacks of malafides’ and is in ‘direct contravention of clause 15’ of the Kirloskar family deed. The suit is scheduled to come for hearing on August 7.
