Pune : Family Dispute Unravels at Kalyani Group Over Business Interests

A family dispute within the Kalyani Group, one of India’s prominent industrial conglomerates, has escalated with new claims from various family members. 

The disagreement involves Bharat Forge Chairman Baba Kalyani and his sister Sugandha, along with her husband Jaidev Hiremath, regarding their stakes in Hikal, a company under the Kalyani Group umbrella. The dispute revolves around allegations of breaches in a family arrangement concerning the transfer of shares in Hikal.

Sugandha and Jaidev Hiremath initiated legal action seeking the enforcement of obligations outlined in a family arrangement following the passing of their mother.

Subsequently, their children filed a lawsuit seeking partition of the Kalyani family assets, including Bharat Forge and other listed and privately held companies. The complexity of the dispute has been further compounded by allegations of collusion between Hikal officials and the Hiremath family to impede efforts by Kalyani family entities to increase their stake in Hikal.

At the heart of the disagreement is a purported family arrangement from 1994, which Sugandha claims superseded an earlier pact from 1993. According to her, this arrangement, drafted during a meeting at the Taj Mahal Hotel in Mumbai, outlined the transfer of Hikal shares to the Hiremaths. 

However, Baba Kalyani disputes the validity of the 1994 arrangement, asserting that it pertained to resolving ownership issues within Bharat Forge and Kalyani Forge rather than Hikal.

Additionally, Sugandha alleges that Kalyani intentionally allowed a buyback agreement involving Hikal shares to expire, despite earlier partial compliance. 

The founding of Hikal by Jaidev Hiremath, supported by seed capital from his Father in law, Neelkanth Kalyani, further complicates the dispute, with conflicting claims regarding the management and control of the company.

Boardroom Battles:

– Last year, institutional shareholders of Bharat Forge voted against reappointing Baba Kalyani as the company’s managing director, although the special resolution passed due to the dominant promoter group’s support. However, Baba Kalyani’s tenure as a board member at Hikal came to an end after failing to secure sufficient shareholder votes for reappointment.

– Sugandha’s substantial stake in Hikal influenced the outcome, with around 48% of shareholders voting against Baba Kalyani’s reappointment. Institutional and non-promoter shareholders also mirrored the divide, with a significant portion opposing Kalyani’s continuation on the board.

New Legal Front:

– Sugandha and Jaidev Hiremath’s children, Sameer and Pallavi, have filed a lawsuit seeking partition of the Kalyani family assets, including Bharat Forge and other listed and privately held companies, claiming their share of the Kalyani Hindu Undivided Family (HUF) assets.

– The lawsuit alleges that Baba Kalyani has enjoyed the sole benefit of the HUF’s assets without sharing information with the rest of the family. The siblings assert their rights as coparceners in the Kalyani Family HUF, citing the contributions of their great-grandfather Annappa N Kalyani to the creation of the family wealth.

Response and Further Developments:

– A spokesperson for the Kalyani Group has refuted the allegations, describing them as factually incorrect, misconceived, and motivated by ulterior motives. The group emphasizes that they have not been served with any suit and consider the assertions devoid of any legal standing.

The Kalyani Group in their message stated, ““The claims by the petitioners have been made with the intent to malign the image of Shri Baba Kalyani, his family & the Group. We categorically deny these allegations and state that the aversions made are factually incorrect and baseless. It is shocking that the petitioners filed the suit on March 20th, 2024 in the Pune Court, and inappropriately handed over a copy of suit to the media first, without even servicing the suit on the defendants, or even before the matter was admitted for hearing in the court. This itself shows the malicious intent of petitioners, which is to defame and tarnish the image of Shri Baba Kalyani, his family, and the Group. As and when the suit is served on us, we will defend our position before the court of law, including initiating appropriate civil/criminal defamation proceedings for tarnishing the image of Mr. Kalyani, his family and the Group.”

– The Hiremaths have not responded to queries regarding the lawsuit, but Sameer and Pallavi Hiremath assert their rights as coparceners and seek equitable distribution of the family assets.

The ongoing dispute underscores the complexities of intergenerational wealth management and corporate governance within family-owned conglomerates, reflecting broader issues of succession planning and familial relationships in business contexts.