On Sunday, Kirloskar Brothers Limited (KBL) denied claims that company had spent Rs 274 crore on professional legal fees and consulting fees related to its Chairman and Managing Director Sanjay Kirloskar’s personal disagreement with his brothers Rahul and Atul.
After being exonerated of insider trading charges by the Securities Appellate Tribunal, Kirloskar Pneumatic Co. Ltd. Executive Chairman Rahul Kirloskar and Kirloskar Oil Engines Ltd. Executive Chairman Atul Kirloskar had on Saturday accused KBL of “mis-utilizing shareholder resources of a publicly listed company and misusing regulatory machinery” (SAT).
As a publicly traded firm, Rahul and Atul had claimed that KBL should explain why it “has been spending significant amounts aggregating to around Rs 274 crore towards payment of professional and legal expenditures” ever since their dispute began in 2016.
Over the family settlement document for the assets of the more than 130-year-old Kirloskar Group, the brothers have been at odds.
In a statement, KBL stated: “We wish to clarify that the total legal fees for the last seven years is around Rs 70 crore.”
As the only multinational in the group with manufacturing subsidiaries across four continents, KBL, it continued, these costs are for tax matters, labour matters, arbitration pertaining to project business, cases related to domestic and international projects, patents, property documents, and for overseas business.
The statement went on to say, “All of these expenses have been mistakenly considered to be legal fees. The majority of the aforementioned Rs 274 crore is made up of professional fees paid to reputable Indian and international consultants to help the company’s operations.”
According to KBL, its “legal expenses of Rs 70 crore over the last seven years is logical and does not substantiate any claim made” for a business with a combined sales of more than Rs 2,500 crore annually.
The largest shareholder, Kirloskar Industries Ltd (KIL), hasn’t written to KBL in a while about their worries about paying professional and legal expenditures ever since the conflicts started, it continued.
“In reality, they have consistently voted in favour of accounts and dividends. And now, in 2022, Atul Kirloskar, Chairman of KIL, has made these unfounded accusations in a statement “KBL said.