In a significant development in the ongoing Kirloskar Group dispute, the Securities and Exchange Board of India (SEBI) has taken a firm stance by filing an affidavit in the Bombay High Court. The market regulator is demanding the disclosure of a 2009 family agreement that divided Kirloskar Group companies among three key family members: Sanjay Kirloskar, Atul Kirloskar, and Rahul Kirloskar.

SEBI's Position

SEBI's move comes in opposition to a plea filed by four listed Kirloskar companies:

• Kirloskar Oil Engines
• Kirloskar Industries
• Kirloskar Ferrous Industries
• Kirloskar Pneumatic Company

These companies had challenged SEBI's advisory, which required the disclosure of the deed of family settlement. The regulator argues that the agreement contains crucial information that shareholders have a right to know, particularly a non-compete clause that restricts Kirloskar Oil Engines from entering businesses that compete with other Kirloskar entities.

The 2009 Family Settlement

The family agreement in question, dating back to 2009, reportedly designated specific roles and company associations for the Kirloskar family members:

• Atul Kirloskar was named as the promoter of four companies
• Rahul Kirloskar was designated as the promoter of the same four companies, plus GG Dandekar Properties
• Sanjay Kirloskar was appointed as the promoter of the flagship company, Kirloskar Brothers

Implications for Shareholders

SEBI's insistence on disclosing the family agreement underscores the regulator's commitment to transparency in corporate governance. The non-compete clause, in particular, is viewed as material information that could significantly impact shareholders' decisions and their understanding of the company's strategic direction.

The Ongoing Dispute

This latest development is part of a broader, ongoing dispute within the Kirloskar Group. The SEBI affidavit and the resistance from the listed Kirloskar companies highlight the complex nature of family-run businesses in India and the challenges they face in balancing family interests with corporate governance and regulatory compliance.

As the case unfolds in the Bombay High Court, it will be closely watched by investors, corporate governance experts, and the broader business community. The court's decision could have far-reaching implications for how family settlements in large business groups are handled in terms of disclosure and transparency.

The Kirloskar Group, with its diverse interests spanning various industries, remains a significant player in India's industrial landscape. The outcome of this legal battle could set a precedent for how similar family-run conglomerates manage their internal agreements and their obligations to shareholders and regulatory bodies.

Kirloskar Brothers Limited (KBL), a leading pump manufacturing company, has successfully concluded its legal battle with Andhra Pradesh GST authorities after the tax department withdrew demand notices and the company subsequently withdrew its writ petition. This marks a positive resolution to the Rs. 15.48 crore GST dispute that had been ongoing since early 2025.

Background of the GST Dispute

The tax controversy originated from demand notices issued to the company's directors regarding alleged GST arrears. The dispute involved two separate notices with different amounts and periods:

The tax demands related to an unincorporated joint venture named IVRCL-KBL-MEIL, formed by Kirloskar Brothers Limited in partnership with IVRCL Ltd. and Megha Engineering & Infrastructure Ltd. for executing a project with the Water Resources Department of Andhra Pradesh.

Legal Proceedings Timeline

Kirloskar Brothers had filed multiple writ petitions to challenge the GST demand notices. The company initially received a demand notice on August 5, 2025, requiring payment within seven days. In response, the company filed a writ petition on August 12, 2025, challenging the assessment order and demand notice.

Resolution and Withdrawal

In a significant development, The Deputy Assistant Commissioner of State Tax, Dwarakanagar Circle, Visakhapatnam Division, issued an endorsement letter on November 20, 2025, informing that the alleged demand notices issued to the directors of the company had been withdrawn.

Consequent to this withdrawal by the APGST authorities, the directors of Kirloskar Brothers also withdrew their writ petition (WP/47631/2025) before the Andhra Pradesh High Court at Amaravati on November 26, 2025. The High Court's order confirming the withdrawal was received by the company on December 15, 2025.

Impact on Company Operations

This resolution eliminates a significant legal and financial overhang for Kirloskar Brothers Limited. The withdrawal of both the tax demand notices and the subsequent legal proceedings provides clarity and removes uncertainty that could have impacted the company's operations and financial planning.

Regulatory Compliance

Throughout the proceedings, Kirloskar Brothers maintained transparency by regularly updating stock exchanges about developments in the case. The company's proactive approach in challenging the notices through proper legal channels while keeping stakeholders informed demonstrates strong corporate governance practices.

The successful resolution of this GST dispute strengthens Kirloskar Brothers' position and allows the company to focus on its core business operations without the distraction of prolonged legal proceedings. This development is particularly significant for the pump manufacturing company as it continues to execute infrastructure projects through joint ventures.