Vijay Ravindra Kirloskar, chairman of Bengaluru-based Kirloskar Electric Company (KEC) Ltd., has moved the High Court of Karnataka seeking a direction to several persons, including one of his nephews and a family friend, from alienating or transferring around 2.51 crore shares worth ₹555 crore of TD Power System Ltd. (TDPSL), which was founded by him in 1999.
The High Court, in its interim order, has restrained Mohib Nomanbhai Khericha, Mr. Kirloskar’s family friend and chairman of TDPSL, Nikhil Kumar, Mr. Kirloskar’s nephew, and others from alienating/transferring/encumbering/dealing with and creating any third party rights in respect of 2,51,32,165 shares of TDPSL.
Justice S.R. Krishna Kumar passed the interim order on July 12 on the petitions filed by Mr. Kirloskar and several KEC Trusts, who were the original and major shareholders of TDPSL. However, the court reserved liberty for the respondents to seek modification/vacation of the interim order.
The petitioners had moved the High Court as a Commercial Court had not granted temporary injunction against alienation of these shares even though it had treated the issue as requiring urgency.
The petitioners have complained that Mr. Khericha and others, allegedly with mala fide intention, had recently sold 3.77 crores shares, valued at ₹584 crore, of TDPSL at the rate of ₹221 per share through block deals in the stock market.
It has been claimed in the petition that Mr. Kirloskar and the KEC Trusts owned around 67.7% shares of TDPSL. However, these shares were transferred to Mr. Khericha for holding them on behalf of Mr. Kirloskar, who resigned from the posts of chairperson and director of TDPSL to overcome difficulty in raising loans for TDPSL from banks if he were to continue in the post.
The shares were transferred to Mr. Khericha only on the clear agreement that the shares should be transferred back to Mr. Kirloskar and KEC Trusts as and when required, it has been contended in the petition while alleging that Mr. Khericha failed to transfer shares back despite several communications from past several years.
However, on June 30 it was noticed by Mr. Kirloskar from the stock exchange reports that around 3.77 crore shares of TDPSL were sold in block deals, it was pointed out in the petition. It was also alleged in the petition that the fact that Mr. Kirloskar was the promoter of the company and shares on behalf of him and the KEC Trusts were held by Mr. Khericha were not disclosed when TDPSL came out with public issue of shares in 2011.