It¡¯s become a norm for wealthy business families to undergo feuds over ownership and control of assets and business. Even blood relations go sour as we have seen in cases like the Raymond father-son fallout or the Reliance brothers Anil and Mukesh going their own ways.?
Another family that has been making headlines is the Kalyani Group. This Hindu Undivided Family business is at the center of a massive fight between two siblings Baba Kalyani and his sister Sugandha Hiremath. This brother-sister duo has been fighting over a family will which reportedly distributes the wealth amongst them.?
For the unversed, 75-year-old Baba Kalyani has amassed a networth of over 4.1 billion dollars( Rs 34 Thousand Crore). Earlier this year, he was removed from the board of the family¡¯s chemical company called Hikal.?
Kalyani, who is the chairman of Bharat Forge, India¡¯s leading manufacturers of defense equipment, is at loggerheads with his sister Sugandha Hiremath over a family will.?
Sugandha, the sister of Baba Kalyani, filed a lawsuit against him, alleging that he had failed to fulfill the terms of the 1994 Family Arrangement made with their father, Dr. Neelkanth Kalyani.?
This arrangement involved transferring control and shares of Hikal to Sugandha and her husband, Jaidev Hiremath.
The core of the disagreement revolves around the ownership of 34.01% shares of Hikal Ltd, which are held by companies under the control of Baba Kalyani. These companies, namely Kalyani Investment Company Ltd and BF Investment Ltd, have also been named as defendants in the ongoing lawsuit filed in the Bombay High Court.
Presently, the Hiremaths own 34.84 percent of Hikal while Baba Kalyani holds 34.01 percent.??Jaidev Hiremath (74) is the chairman of Hikal, while Sugandha (71) serves as non-executive director on the Board of Hikal.?
In their lawsuit, the Hiremaths are requesting the transfer of 34.01% ownership, valued at Rs 1300 crores, from companies under Baba Kalyani's control to themselves. They are basing their claim on a Family Arrangement established at the Hotel Taj Mahal in Mumbai on June 19, 1994. This arrangement was made in the presence of Dr. Neelkanth Kalyani(their father), his wife Sulochana Kalyani(mother), Baba Kalyani, Padma Bhushan N. Vaghul (then Chairman and Managing Director of Industrial Credit and Investment Corporation of India, now ICICI Bank), and Padma Bhushan S.S. Nadkarni (then Chairman of SEBI).
As per reports, this arrangement was made to reach a truce following the disagreements between Baba and his parents Neelkanth and Sulochana Kalyani.? This arrangement mentioned that Baba Kalyani has to transfer the shares of Hikal to the Hiremaths.
Hikal Chemicals Industries, now known as Hikal, was established in 1988. Neelkanth Kalyani, provided initial funding for Hikal through his company, Surajmukhi Investment and Finance Ltd, and received 5 lakh shares in return. When the first plant in Maharashtra became operational in 1991, the Hiremaths acquired 2 lakh shares in Hikal, which had since become a publicly traded company.
Right from the beginning, Hikal was run and controlled by the Hiremaths. Sugandha¡¯s husband Jaidev serves as the executive chairman while their son Sameer is the MD.??Baba Kalyani served as non executive chairman from 1992-2012, and then became non executive director.?
The lawsuit asserts that Jaidev has consistently overseen day-to-day operations, finance, and marketing due to his expertise in these areas.
Baba had minimal involvement in the management of Hikal, attending only 58 out of 153 board meetings and 10 out of 34 annual general meetings held between 1991 and 2022-23.?
The Hiremaths are also citing a Buyback agreement signed with Surajmukhi, which permits them to repurchase 220,000 shares of Hikal. However, they have only repurchased 110,000 shares so far. They claim in the lawsuit that Baba Kalyani has been hesitant to transfer the remaining 110,000 shares.
In the 1990s, Sugandha Hiremath penned numerous letters to BNK aka Baba Kalyani, urging him to fulfill the buyback agreement regarding shares. Each of her letters concluded with an expression of gratitude, emphasizing her request for her older brother to honor his commitment.?
Additionally, her husband, Jaidev, also corresponded with Baba on the matter in the year 2000.
The family dispute has worsened further as Baba Kalyani¡¯s nephew, Sameer Hiremath and niece Pallavi Anish Swadi have filed a case against him and his family in the Pune Sessions court seeking partition of family assets.?
They mentioned that these shares encompass holdings in various listed and private limited firms affiliated with the Kalyani Group, such as Bharat Forge, Kalyani Steels Limited, and Kalyani Consultants. They also noted that Sameer Hiremath and Pallavi Anish Swadi hold a stake in the Kalyani Hindu Undivided Family (HUF) assets.
They are also seeking the division of numerous assets owned by the conglomerate, which is led by Baba Kalyani.
According to the petition, they have requested that all businesses initiated with investments from the core of the joint family led by Annappa Kalyani (father of Neelkanth Kalyani and grandfather of Baba Kalyani) be considered joint family properties. Annappa N Kalyani (ANK) served as the "Karta and manager of the Joint Hindu family, consisting of himself, his first wife Parvati Annappa Kalyani, second wife Akutai Annappa Kalyani, and his son Neelkanth Annappa Kalyani," as stated in the petition.?
The petition alleges that Baba Kalyani is utilizing the assets independently and has not disclosed any information regarding them to the petitioners.
As for the Hikal shares transfer case, it remains pending before the court.
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