SEBI seeks disclosure of Kirloskar family agreement, flags non-compete clause as key

The Securities and Exchange Board of India (SEBI) has filed an affidavit in the Bombay High Court seeking disclosure of the 2009 family agreement that divided the Kirloskar Group companies among Sanjay Kirloskar, Atul Kirloskar, and Rahul Kirloskar.

The market regulator is opposing a plea filed by four listed Kirloskar companies, backed by Atul and Rahul Kirloskar, which challenged SEBI’s regulations requiring disclosure under the Listing Obligations and Disclosure Requirements (LODR).

The four companies — Kirloskar Oil Engines, Kirloskar Industries, Kirloskar Ferrous Industries, and Kirloskar Pneumatic Company — had moved the court against SEBI’s December 2024 advisory that directed them to disclose the deed of family settlement (DFS) executed in 2009.

In its affidavit, SEBI argued that the family agreement contains a “non-compete clause” which restricts Kirloskar Oil Engines from entering businesses in competition with other Kirloskar entities.The regulator maintained that this clause constitutes material information that shareholders and investors are entitled to know.

The regulator said investors deserve to know if control over a listed company is being exercised through a private arrangement and urged the court to dismiss the plea.

The 2009 family settlement outlined the distribution of promoter roles within the group. Atul Kirloskar was named as promoter of Kirloskar Oil Engines, Kirloskar Industries, Kirloskar Ferrous Industries, and Kirloskar Pneumatic Company, while Rahul Kirloskar was also listed as promoter for the same companies along with GG Dandekar Properties. Sanjay Kirloskar was named as promoter of Kirloskar Brothers, the flagship company of the group.