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 taken legal action against a substantial GST demand notice issued by Andhra Pradesh tax authorities. The company has filed a writ petition with the Andhra Pradesh High Court, contesting a Rs. 15.48 crore tax claim for the financial year 2017-18.

Background of the Dispute

The tax demand is associated with an unincorporated joint venture (JV) formed between IVRCL Ltd., Kirloskar Brothers, and Megha Engineering & Infrastructure Ltd. This JV was established for a project with the Water Resources Department of Andhra Pradesh.

Legal Challenge

KBL received a demand notice from the Assistant Commissioner (ST), Dwarakanagar Circle, Vishakhapatnam – 1, State Tax Department, Government of Andhra Pradesh. The notice required payment of the alleged tax arrears within seven days of receipt.

In response, Kirloskar Brothers filed a writ petition (No. WP/31611/2025) with the Andhra Pradesh High Court. The company is seeking to set aside the impugned assessment order and demand notice, along with an interim stay pending the writ petition.

Financial Implications

The exact financial impact of this litigation remains uncertain at this stage. Kirloskar Brothers has stated that the financial implications cannot be ascertained due to the ongoing legal proceedings. The company has committed to informing the stock exchanges of any developments in this regard.

Company's Stance

Kirloskar Brothers maintains that the tax demand is related to transactions undertaken by the unincorporated Joint Venture, of which it is a partner. The company's decision to challenge the demand in court suggests that it believes there are grounds to contest the tax authorities' claim.

Broader Context

This legal challenge comes at a time when Kirloskar Brothers is also dealing with other significant corporate matters. In a separate development, the company recently announced the appointment of Mr. Harsh Vardhan Shringla as an Independent Director, subject to shareholder approval. This appointment is for a term of five years and is part of the company's efforts to strengthen its board with professionals from diverse backgrounds.

As Kirloskar Brothers navigates these legal and corporate governance challenges, stakeholders will be closely watching the outcomes and their potential impact on the company's operations and financial position.