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 The shareholders of Kirloskar Brothers Ltd (KBL)have rejected a resolution pertaining to a forensic audit in the affairs of the company, a stock exchange filing said on Monday.

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.

ABOUT THE AUTHOR
Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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