Kirloskar Brothers shareholders reject resolution of forensic audit

On December 8, Kirloskar Brothers Ltd has called for an extraordinary general meeting (EGM) of its shareholders to consider and approve forensic audit of the affairs of the company by an external agency

As per the filing, 63.99% of the shareholders voted against the resolution while 36.01% were in favour of the resolution proposed by Kirloskar Industries Ltd.

The resolution had called for the appointment of an independent forensic auditor for conducting a forensic audit to investigate and verify the expenses incurred by KBL on legal, professional consultancy charges over the past six years and the affairs of the company.

It had also sought investigation to verify all records, books of accounts, minutes books, and other documents of the company besides examining the conduct of the board of directors, including independent directors.

Sanjay Kirloskar, the chairman and managing director of KBL, and his brothers Atul and Rahul have been at odds since 2016 over a family settlement agreement for the assets of the more than 130-year-old Kirloskar company.

In October, Kirloskar Industries Ltd (KIL) along with Atul and Rahul Kirloskar, had sought convening of an extraordinary general meeting of shareholders of KBL seeking a forensic audit of the affairs of the latter by an external agency.

Since their dispute began in or around 2016, they had demanded that KBL, as a listed firm, should explain why and on what basis it has been spending enormous sums of nearly ₹274 crore on paying for professional unlawful costs and consulting fees.

Pertaining to the legal fees,KBL claimed that the legal fees over the last seven years were approximately ₹70 crore, while a “major portion of the said ₹274 crore is professional fees paid to various Indian and overseas reputed consultants to improve the company’s business.