Extraordinary general meeting brings focus back on Kirloskar Brothers' deed

The Deed of Family Settlement (DFS) signed by Kirloskar siblings in 2009 has been brought to the forefront ahead of the extraordinary general meeting of Kirloskar Brothers. In case of any possible rift between the 18 group companies, it was necessary to consult the deed, a report in businessline said.

Each signatory of the DFS is mandated to follow the rules and implement the deed with the approval of the respective board of directors, the report added. 

The members of the Kirloskar Group and entities were also supposed to sell shares of some companies to each other to strike a balance. They were also to follow the principles of ownership and management control in letter and spirit. 

So, according to businessline, Atul Kirloskar-led entities and other family members sold shares of Toyota-related entities to Vikram Kirloskar and his nominees in December 2009 after the DFS was signed.

But violating the DFS, Kirloskar Oil Engines acquired La Gajjar Machineries in June 2017. This company is in direct competition with Sanjay Kirloskar-led Kirloskar Brothers (KB), which went to the Supreme Court and alleged that it was a selective implementation of the DFS. 

Atul Kirloskar leads Kirloskar Industries (KI) and Sanjay Kirloskar leads KB. KI owns a significant stake in KB. KI, last week, announced that it would hold an extraordinary general meeting with KB. 

"While Sanjay Kirloskar has been repeatedly claiming that KBL has taken the DFS on record, what steps it has actually taken to bind itself with the DFS, in accordance with the provisions of applicable law?" it wrote in a letter to the shareholders. 

According to businessline, Kirloskar Industries, which has a significant stake in Kirloskar Brothers wrote to stock exchanges last week that the board has approved convening an Extraordinary General Meeting of the shareholders of Kirloskar Brothers.