Magicbricks’ Q2 revenue up 74% at Rs 55 cr Kirloskar brothers go to NCLT as rift widens

Rahul and Atul Kirloskar want Sanjay removed from KBL’s board

Realty portal Magicbricks said Sunday its revenues increased by 74% to ₹55 crore in the July-September quarter on the back of high searches and launch of exclusive deals ahead of the festive season. “The performance in the second quarter of this fiscal comes on the backdrop of its reported growth in the first quarter when revenues had grown by 48%,” the company said. A substantial increase in traffic and searches, high-impact and exclusive digital marketing campaigns for select customers, and launch of exclusive deals boosted revenue growth in the second quarter, the company said in a statement. The company, however, did not reveal its profit numbers. It also claimed that the Magicbricks android app touched five million downloads.

: Cracks in the Kirloskar family, which controls the 130year-old Kirloskar Group, have widened.

Brothers Rahul and Atul have approached the Mumbai bench of the National Company Law Tribunal (NCLT) to oust sibling Sanjay as chairman and managing director of Kirloskar Brothers Ltd (KBL), alleging oppression and mismanagement in the group’s flagship company.

They are also seeking the removal of the rest of the current board members and have sought the appointment of their own nominees on the board.

In their petition, Atul and Rahul have alleged that while the board has been arbitrarily rejecting their pre-clearance request for selling or buying shares, Sanjay Kirloskar has been increasing his shareholding in the company.

BSE-listed Kirloskar Brothers’ code of conduct for promoters and other key management personnel requires them to take the board’s clearance before buying or selling the company’s shares.

“(The board is) coercing petitioner No. 2 (Rahul) to only sell the shares to respondent No. 2 (Sanjay) under the false pretext of deed of family settlement (DFS),” says the petition, a copy of which was reviewed by Mint. “Respondent No. 2 has repeatedly misused his position of being the chairman and MD of KBL and acted in the manner prejudicial not only to the interest of the petitioners (Rahul and Atul) but also detriment of the Respondent No. 1 (KBL).”

The Kirloskar promoters had entered into a DFS in 2009 to dis-

tribute their assets in the form of shares of various companies in Kirloskar Group and cash held in trust and investment companies, among the signatories of DFS, to avoid a potential dispute within the family. Rahul and Atul Kirloskar now claim, through the petition, that the board’s continuing rejection of their pre-clearance request contravened the letter and spirit of the DFS.

“The DFS does not contain any fetters on any of the signatories to either buy or sell shares in any of the companies mentioned therein or any right such as right of first refusal, pre-emption or right of the first offer etc. that may compel any of the parties to buy or sell shares to/from one another,” the petition says. “There is no such restrictive covenant in the DFS.”

Rahul and Atul, who are into the business of renewable energy and investments through listed company Kirloskar Industries Ltd (KIL), are now seeking the

appointment of an independent chairman or administrator as well as petitioners’ nominees on the board of KBL.

The petitioners have named, apart from KBL and Sanjay Kirloskar, other KBL board members as respondents. The KBL board currently includes Lalita D. Gupte, former joint managing director at ICICI Bank; and Kishor A. Chaukar, former managing director of Tata Industries Ltd. Former Reserve Bank of India deputy governor Rakesh Mohan is listed as an independent director on the KBL website but is not mentioned in the petition. It is possible he joined KBL after the petition was drawn up.

The petition also requests the tribunal to appoint an independent auditor to conduct a forensic audit of KBL’s books of accounts and affairs till the pending hearing and final disposal of the case. The estranged brothers are also seeking the tribunal’s intervention to allow them to buy or sell

shares; the petitioners had made three pre-clearance requests from KBL, all of which had been rejected. The Mumbai NCLT bench, presided over by V.P. Singh and Ravikumar Duraisamy, will hear the dispute on 17 December. In June, Sanjay Kirloskar petitioned the city civil court in Pune against Atul, Rahul, cousin Vikram and late cousin Gautam Kulkarni’s family, alleging breach of DFS, which had the non-competing clause, and sought damages of ₹750 crore from the family members.

Founded by Lakshman Rao Kirloskar, the Pune-based Kirloskar Group is one of the earliest Indian engineering conglomerates. Later, his three sons, Shantanu, Prabhakar and Ravi Kirloskar took over the group’s reins and expanded into different areas of manufacturing. The first formal separation of the group happened in 2000, when Vijay, son of Ravi Kirloskar, decided to part ways with the rest of the clan.