Bitter family dispute hits 130-year-old business, now ready to fight with SEBI, they are linked to Ratan Tata through…

Four Kirloskar companies said they are preparing to legally challenge a letter by markets regulator SEBI asking them to disclose the deed of family settlement that was signed by members of the Kirloskar family on September 11, 2009.

One of India's oldest and most prominent industrial conglomerates, the Kirloskar Group, has been engaged in a bitter family feud for the past eight years. The disagreement centers around the division of assets among family members. Recently, the SEBI stepped in, asking for disclosure of a family settlement agreement signed in 2009. This move has led the group's companies to prepare for a legal battle against SEBI.

Kirloskar Family Dispute

In 2016, involving members of the Kirloskar family over the interpretation and enforcement of a Family Settlement Agreement (FSA) signed on September 11, 2009. SEBI, in a letter dated December 30, 2024, directed four Kirloskar Group companies to disclose the agreement under listing obligations and disclosure requirements.

In response, the companies have declared their intent to challenge SEBI's directive in court. The four entities Kirloskar Ferrous Industries Limited, Kirloskar Industries Limited, Kirloskar Pneumatic Company Limited, and Kirloskar Oil Engines Limited have stated that the FSA does not bind them and has no direct impact on their operations or obligations.

What Are Companies Saying?

The companies have argued that:

1. The FSA's enforceability is already under civil court review since 2018.
2. SEBI has acted beyond its jurisdiction by commenting on a matter sub judice.
3. The regulator's directive disregards established principles of contract, corporate, and company law.
4. The FSA imposes no specific restrictions or liabilities on the listed companies.

Ownership and Allegations

The feud involves three key family members, Sanjay Kirloskar, Chairman and Managing Director of Kirloskar Brothers Limited (KBL). Atul Kirloskar, Executive Chairman of Kirloskar Oil Engines Limited (KOEL). Rahul Kirloskar, Executive Chairman of Kirloskar Pneumatic Company Limited (KPCL).

Sanjay Kirloskar has accused his brothers, Rahul and Atul, of trying to wrest control of his legacy and misleading the public. The group, which boasts a market capitalization of approximately Rs 1.56 lakh crore, has 14 manufacturing facilities globally. Sanjay has also claimed that the family dispute has led to a change in the company's iconic logo.

SEBI's Role and Family's Resistance

SEBI's intervention came in the form of a directive to disclose the 2009 agreement under the Listing Obligations and Disclosure Requirements (LODR) regulations. However, the companies argue that the regulator's decision is flawed and factually inaccurate, leading to their decision to seek judicial recourse.

Kirloskar Group Legacy

The Kirloskar Group, with its storied 130-year history, is one of India's industrial stalwarts. It operates in sectors like engineering, manufacturing, and energy, and its products have a global reach. Despite its impressive legacy, the group finds itself in turmoil as family members vie for control.

Whether the feud will harm the group's business or strengthen its governance framework remains to be seen.

How Is Ratan Tata And Kirloskar Are Linked?

Manasi Kirloskar is the daughter of the late Vikram Kirloskar, she is a fifth-generation scion of the Kirloskar dynasty of highly respected business families.

Manasi Kirloskar is wife of Neville Tata who is son of Noel Tata, half-brother of Late Ratan Tata. Neville Tata's grandmother Simone Tata founded Trent. Neville Tata is heading the operations of Trent.

Toyota Kirloskar Motor Private Limited (TKM) is an Indian joint venture between Toyota Motor Corporation and Kirloskar Group, for the manufacture and sales of Toyota cars in India.