In accordance with the SAT order, Rahul said: “…we did not engage in any insider trading when we sold the shares of Kirloskar Brothers Ltd (KBL) to Kirloskar Industries Ltd in 2010. Accordingly, the SAT order exonerates us from the charges of insider trading and fraudulent business practices brought against us by SEBI.”
He further stated that the SAT order also stated that the SEBI order had been adopted based on complaints filed by KBL, which had also filed an appeal with the SAT for “enhanced penalties and restitution of amounts “against them. The appeal was dismissed by the SAT on the grounds that KBL is not prejudiced by SEBI’s decision.
“It appears from the order that it was KBL alone on the basis of which the investigation had begun against us… It is also evident that KBL was not satisfied with the sanction imposed by SEBI and in fact appealed appealing this sanction is not enough,” Rahul added.
The SAT came to the conclusion that KBL was not an aggrieved party and therefore had no locus to file this proceeding, he added.
“So it’s obvious that KBL is part of the attempt to facilitate Sanjay Kirloskar in his litigation against us by initiating complaints and taking actions for which he doesn’t even have the locus in the first place and in the process misusing misuse the resources of shareholders of a publicly traded company and abuse regulatory mechanisms,” Rahul said.
As a listed company, KBL should justify the rationale and the basis on which it “spends huge sums totaling around Rs 274 crores for the payment of professional legal fees and consultancy fees” since the dispute arose in 2016. , he said.
“This amount equates to more than 60% of KBL’s PAT for the same period, which many shareholders have questioned. These expenses appear to have been incurred to facilitate private litigation by KBL’s CEO and his family, causing thus losses to the public shareholders,” he said.
For his part, Atul said, “I would also question corporate governance and the independence of independent directors when such amounts are spent on litigation.”
Comments from KBL could not be obtained immediately because a request sent by mail went unanswered.
The brothers have been in a row over the family settlement deed over the assets of the Kirloskar Group for over 130 years and the case has even reached the Supreme Court.
Last year in July, KBL accused four companies run by his brothers Atul and Rahul of trying to “usurp” his 130-year-old legacy and try to “mislead” the public.
This followed an announced “refresh” exercise by companies led by the Atul and Rahul brothers of their respective businesses, with the aim of transitioning from engineering-led companies to customer-focused solution providers.