The Securities and Exchange Board of India (SEBI) has opposed an appeal filed by Kirloskar Oil Engines Ltd (KOEL) in the Securities Appellate Tribunal (SAT) challenging the regulator’s advisory to the company to disclose the Deed of Family Settlement (DFS).
KOEL had challenged the SEBI directive requiring the disclosure of a 2009 Deed of Family Settlement (DFS).
Kirloaskar Brothers Ltd alleges that KOEL violated the DFS by acquiring La Gajjar Machineries in 2017, a move that directly competes with KBL’s pump business. This acquisition prompted KBL to escalate the matter to the Supreme Court, where the case is still being heard.
In October 2024, SEBI had directed KOEL to disclose the DFS, citing its material implications for shareholders and compliance requirements under the Listing Obligations and Disclosure Requirements (LODR) regulations.
Legal team representing KBL appeared yesterday before the SAT, when the matters were mentioned and thereafter listed for today. They mentioned the SAT that they would be filing and serving 5 Intervention Applications. These Intervention Applications were filed, served and numbered yesterday and listed for hearing today.
Counsel D. Khambata, appearing on behalf of KOEL, made submissions before the Bench inter alia reiterating submissions made before SEBI, prior to the SEBI communication of 30.12.2024. He also referred to and sought to place reliance on an earlier Letter issued by SEBI dated 17.02.2021 (issued under the old LODR Regulations of 2015). During his submissions, he did submit that once the DFS is disclosed under the SEBI LODR, it would be become binding on KOEL etc. (including the non-compete provisions) and hence the objection that a non-signatory entity should not be bound.
However, at that stage, Counsel S. Rustomjee, appearing on behalf of SEBI, sought liberty to file SEBI’s reply to the aforesaid appeals.
Senior Counsel J. Dwarkadas, sought liberty to have the KBL Intervention Applications heard and also made brief submissions before the Bench, inter alia as regards KBL’s position as a complainant and the changed position under the SEBI LODR (as amended).
SEBI has been accorded six weeks’ time to file its reply to the appeals. Next date of hearing is April 7, 2025.