Sebi opposes KOEL’s appeal on family settlement disclosure advisory | Company Business News
The Securities and Exchange Board of India (Sebi) has opposed an appeal filed by Kirloskar Oil Engines Ltd (KOEL) in the Securities Appellate Tribunal (SAT) challenging the regulator’s advisory to the company to disclose the Deed of Family Settlement (DFS).
Sebi’s advisory is an administrative order and an appeal against it is not maintainable, senior advocate Shiraz Rustomjee who appeared for the regulator said.
The DFS, a document signed in 2009, outlines the distribution of ownership, management and control of various listed and unlisted Kirloskar entities among different branches of the family.
The disclosure and implementation of the DFS between prominent members of the Kirloskar family and affiliated business entities has become a matter of dispute between the Kirloskar siblings since 2016.
Also read | Kirloskar Family dispute escalates at SAT over disclosure of family settlement agreement
Sanjay Kirloskar, chairman and managing director of Kirloskar Brothers Ltd, filed a complaint regarding the non-disclosure of the DFS by Rahul Kirloskar, executive chairman of Kirloskar Pneumatic Co. Ltd, and Atul Kirloskar, executive chairman of KOEL.
Sebi emphasized that under the amended Listing Obligations and Disclosure Requirements (LODR) regulations, all listed entities are required to disclose agreements affecting their management and control, even if they are not signatories to such agreements.
In December 2024, Sebi advised KOEL to disclose the DFS, stating the document remains subsisting in nature and indirectly imposes restrictions on the listed entities.
KOEL subsequently appealed Sebi’s advisory in SAT, arguing that the DFS did not impose any restrictions or liabilities on the company, and therefore it was not obliged to disclose it under Sebi’s regulations.
Senior advocate Darius Khambata, representing KOEL, argued that the agreement signed between family members had no impact on the broader shareholding, which is why the company could not be compelled to disclose it. He sought an urgent stay on the advisory.
Rustomjee opposed this prayer, claiming the advisory was not time-bound and Sebi ought to be given a chance to respond to the appeal.
A division bench comprising presiding officer Justice P.S. Dinesh Kumar and technical member Dheeraj Bhatnagar posted the matter for hearing on 7 April, and in the meantime, granted KOEL liberty to approach the tribunal “if and when there is a subsequent development in the matter.”
