In a move that could further intensify the shareholder battle in the Karnataka-headquartered TD Power Systems, Vijay Kirloskar, chairman of Bengaluru-based Kirloskar Electric Company, plans to approach the Central Vigilance Commission for a probe into alleged irregularities and non-disclosures by the company’s management.
In his latest letter on the issue, Kirloskar said the pending suit before the Karnataka High Court pertaining to disputes among the TDPS promoters in relation to the shares they hold in a trust and recent transfers made by them were not disclosed in the TDPS’ initial public offering (IPO) prospectus and cannot be termed as sub-judice.
If the misleading communications and conduct of TDPS, its irregularities and non-disclosures are not promptly investigated, “we will now be constrained to approach the CVC and other relevant authorities,” according to the letter sent to the exchanges on Tuesday.
Further, Kirloskar, a shareholder in the company, wants a prompt investigation by regulators including Sebi and BSE.
The move comes after TDPS, in its letter to BSE on October 18, declined to provide clarifications on “deliberate” omissions and misstatements in its IPO prospectus, terming the matter as sub-judice.
Kirloskar had earlier moved the Karnataka High Court staking claim to about 2.51 crore shares worth ₹555 crore of TDPS, a company founded by him in 1999.
Recently proxy firm InGovern Research Services had written to Sebi highlighting deliberate omissions and misstatements by TDPS in its IPO prospectus. This came after an anonymous whistleblower provided the proxy firm with a July 2001 shareholder’s agreement concerning TDPS.
It said vital information regarding the existence of the shareholders agreement, which also mentions Vijay Kirloskar as a promoter, was not included in the company’s prospectus. And so, Sebi and the exchanges must investigate this matter in the larger interest of shareholders, the letter said.
This is not the first instance where TDPS has run into controversy over alleged suppression of information. Earlier this year, a clutch of institutional investors led by mutual funds such as HDFC MF and Aditya Birla MF, too, had expressed concerns over the TDPS management and institutional broker Motilal Oswal Financial Services withholding information related to the promoters’ dispute prior to the sale by promoters.