The family feud and the consequent legal battle among the promoters of Kirloskar Brothers Ltd come against the backdrop of an alleged case of insider trading by Atul and Rahul Kirloskar in 2010. Rahul and Atul Kirloskar recently approached the National Company Law Tribunal (NCLT) to oust sibling Sanjay Kirloskar as chairman and managing director of Kirloskar Brothers, claiming that the board he leads has been arbitrarily rejecting their requests to sell or buy Kirloskar Brothers shares. Eight years ago, on 6 October 2010, some top officials and some members of the promoter group had sold 13.5% of company shares worth about ₹275 crore before financial results were reported on 8 October 2010. In 2012, the Securities and Exchange Board of India (Sebi) sent a letter to the company seeking transaction details. Following this, Kirloskar Brothers hired law firm AZB and Partners to conduct a forensic audit to verify allegations of insider trading The audit found that top officials, including the two brothers, mis-stated in a regulatory disclosure that they were not in possession of unpublished price-sensitive financial information while seeking clearance to sell Kirloskar Brothers shares. The code of conduct for promoters and other key management personnel requires them to take the board’s clearance before transacting in the company’s shares. A person familiar with the development said the forensic audit report is being considered for the investigation. Sebi has not concluded its probe yet.
Forensic audit points to insider trading amid Kirloskar feud
