Kirloskar Brothers (KBL) was granted permission on Thursday to intervene in the Kirloskar Oil Engines (KOEL) versus markets regulator Securities Exchange Board of India (SEBI) case before the Securities Appellate Tribunal (SAT). The KOEL appeal against SEBI, set for hearing on January 17, was listed before Justice D Kumar, M Swaroop, and Dr D Bhatnagar. After reviewing KBL’s submissions, the tribunal allowed them to serve five Intervention Applications to the markets regulator and KOEL’s advocates.
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KOEL had filed an appeal before the SAT challenging a SEBI letter dated December 30, 2024, which advised the company to disclose the Deed of Family Settlement under Regulation 30A of the SEBI Listing Obligations and Disclosure Requirements (LODR).
The order requires KOEL and other associated companies to disclose a 2009 family settlement agreement signed among Kirloskar family members in their personal capacities. On December 30, SEBI issued letters to the four listed companies, citing their failure to disclose the “Deed of Family Settlement” (DFS) under Regulation 30 of the Sebi LODR. Sebi advised that the DFS, dated September 11, 2009, should be made public.
The companies said SEBI’s directive contained factual inaccuracies and overlooked established principles of contract, corporate, and company law. They maintained that the DFS did not impose any obligations or restrictions on the companies, nor was it binding on them.
The dispute centres on the DFS, which delineated separate business lines and companies for different Kirloskar family members. Sanjay Kirloskar of KBL disclosed the DFS in 2023, citing SEBI’s LODR rules, which require promoters to disclose agreements affecting management control. Under the 2009 agreement, Sanjay Kirloskar retained control of KBL, while Atul and Rahul Kirloskar took over KOEL, Kirloskar Industries, and Kirloskar Pneumatic Company. The DFS also included a non-compete clause prohibiting family members and their companies from engaging in rival businesses.
KBL had complained to SEBI in 2018 regarding the non-disclosure of the DFS by KOEL. As KOEL failed to make disclosures, KBIL filed an appeal before SAT in 2021. SAT passed an order, against which KBL filed a Civil Appeal in the Supreme Court in 2022. In June 2023, SEBI made it incumbent upon listed companies to disclose subsisting family settlements,
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