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Rahul Kirloskar unnecessarily casting aspersions on my integrity: Kishor Chaukar tells NCLT

PALAK SHAH Mumbai | Updated on September 29, 2020 Published on September 29, 2020

Being questioned for merely drawing reference to the ‘deed of family settlement’, a key bone of contention among the Kirloskar siblings, says Chaukar, who has been ousted from KBL board

Kishor Chaukar, the top corporate executive who was ousted from the board of Kirloskar Brothers Ltd (KBL) by a shareholder vote led by Rahul Kirloskar and Atul Kirloskar, has said that his integrity and independence were being questioned only because he had drawn a reference to the “deed of family settlement” (DFS), a document on record.

Before he was ousted from KBL by a shareholder vote, Chaukar filed an affidavit in the NCLT (National Company Law Tribunal) last month. When contacted, Chaukar said he had no official communication on his removal from KBL. A source close to him shared the affidavit with BusinessLine.

“My independence was questioned on the basis that I referred to the DFS in my letter dated May 13, 2020. It is a document, which has been taken on record by the board of KBL. Petitioner (Kirloskar Industries) has unnecessarily cast aspersions on my integrity, credibility and my capacity to act without being influenced by some of the respondents. The petitioner impugned my independence merely because I have referred to the DFS,” Chaukar has told the Mumbai bench of the NCLT.

Sibling rivalry

Sanjay Kirloskar on the one side and Rahul and Atul on the other have locked horns in a bitter sibling rivalry. Kirloskar Industries Ltd (KIL) and Rahul Kirloskar camp have filed a petition in the High Court, wherein they had also prayed that the court restrict Chaukar from acting as an independent director of KBL. Apart from KIL, Rahul too addressed a letter to Chaukar repeating the allegations made by KIL against him. Both Atul, Rahul and KIL hold more than 25 per cent stake in KBL.

The DFS document, which had spelt out the settlement terms between the brothers nearly a decade ago, is a key bone of contention among the Kirloskar siblings.

Chaukar, who was appointed as an independent director on the board of KBL for five years, was due for reappointment this month. His earlier term ended in April 2020. A special resolution was to be passed for Chaukar’s reappointment. As per the stock exchange data, nearly 65 per cent votes were cast in favour of Chaukar’s appointment and 35 per cent votes were against it. For a special resolution to pass, 75 per cent of voters have to be in its favour. Rahul, Atul and KIL voted against Chaukar’s reappointment.

Chaukar has further told the NCLT that KIL had marked a copy of a letter to him ‘alleging that his appointment as an independent director was an attempt to circumvent the provision of law, which was again repeated by Rahul in his letter.’

‘Wait for AGM’

However, Chaukar told the court that he suggested to Rahul that his letter was premature and that he should wait for the annual general meeting (AGM) of KBL to be held to ‘see if due process of law was followed and that his reappointment was yet to occur.’

“Petitioner (Rahul’s) allegations against me proceed on the incorrect basis that statutory procedures was not followed... when a resolution was needed to be passed for me to be appointed as an independent director,” Chaukar told the court.

Both Rahul and Atul are of the view that Chaukar was not independent and favourable to Sanjay. A source close to Sanjay said, “Rahul camp was putting pressure on KBL board as the company had declined to part with documents pertaining to insider trading cases.” Market regulator SEBI had recently issued a notice to Rahul, Atul and other entities linked to them for insider trading in KIL. Rahul has officially accused Sanjay of influencing SEBI to initiate the insider trading inquiries against him and others.

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Published on September 29, 2020
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