In a sudden development, the promoters of Kirloskar Oil Engine Ltd (KOEL) have taken over day-to-day management of the company after its top executives quit their post.
The promoters took over the company after KOEL’s managing director Sanjeev Nimkar resigned last month. The other high-profile management top officials who have exited include Jay Ganjal, head of the water management solutions business and Abhay Naik, customer care and services head.
In a letter to BSE, KOEL Company Secretary Smita Raichurkar informed that Mr Sanjeev Nimkar has resigned as the Managing Director of the Company and any other positions held by him in the Company and subsidiaries thereof, with effect from January 27, 2022. The Board of Directors, at its meeting held on the same day, accepted the resignation of Mr Nimkar. Accordingly, he ceases to be a director and a Key Managerial Personnel of the Company with effect from January 27, 2022, the letter said.
In a letter to employees, interim director-in-charge Gauri Kirloskar said, “In the board meeting that was convened after Sanjeev’s resignation, Atul Kirloskar was reappointed as executive chairman of the organisation and I was asked to supervise the day-to-day operations in the interim.”
She further wrote, “I would like to assure you that we are not planning any drastic changes in the organisation, and both our short term and long term goals remain intact. Our partners, be it the GOEM’s, the dealership network or the suppliers, have always been a part of our family and I am committed to ensure that this continues. These are relationships that we have jointly nurtured and developed over many years, and it is the bedrock of who we are as an organization.”
Mr. Atul Kirloskar’s reappointment is till March 31, 2023. His daughter Ms Gauri Kirloskar who is a non-independent, non-executive director, has been entrusted with the task of supervising the operations for six months or till the appointment of the new MD, whichever is earlier. Company officials, however, said she is new to the executive role, the report in ‘The Hindu’ reported.
Industry watchers have also questioned Gauri Kirloskar’s appointment by the board. According to J.N. Gupta, managing director, Stakeholders Empowerment Services (SES), “this goes against the basic definition and role of non-executive directors pronounced under the law. A non-executive director can not have day-to-day responsibility or interference in the day-to-day affairs of the company. In essence, it is an executive position disguised as a non-executive position.”
Atul Kirloskar was named in a 250 crore insider trading scam & fraud by market regulator SEBI. He was barred from participating in the stock market with a heavy penalty imposed. A shareholder has also written to the Independent directors and Audit committee citing corporate governance issues of having such a person on the board of the company. The company remains silent on this matter. As per the company’s annual report, the promoter family holds about 60% stake in the company whose market cap is approximately ₹2,400 crore.
In yet another setback, the company has reported that its electric pumps segment had made a loss in the last quarter. According to The Hindu, the failure of KOEL’s pump business on which the company had invested more than ₹250 crore. This investment in a pump company is being challenged by the promoter family members. There are claims of KOEL’s entry in Pump Business violating the Deed of Family Settlement (DFS) which is being heard in Supreme court.
