Hikal ownership dispute puts Kalyani firms at odds

Two listed firms belonging to the Baba Kalyani Group (BNK Group) have contested their inclusion as parties in a suit pertaining to family dispute over ownership of chemical firm Hikal.

The co-promoters of the company — Kalyani and Hiremath families — are mired in a legal dispute, with the latter seeking transfer of ownership of shares held by the BNK Group, citing nearly three-decade old family arrangement.

An affidavit filed in reply to Hiremath’s suit petition in the Bombay high court, BF Investment (BFIL) and Kalyani Investment Company (KICL) have stated that they are separate and distinct legal entities and were not even incorporated and party to the ‘family arrangement’.

Last month, in an exchange filing, Hikal had disclosed that promoter Jaidev Hiremath and wife Sugandha (Kalyani’s sister) have filed a legal suit seeking performance of family obligations.

Under this, shares of Hikal held by the BNK Group were to be transferred to the Hiremath family as per a family arrangement involving Baba and Sugandha’s parents.

At present, KICL holds 31.36 per cent stake in Hikal, while BFIL holds another 2.65 per cent, which the Hiremath family is staking claim over.

KICL and BFIL have said they have a retail shareholder base of 20,000 and 16,000, respectively, who have invested in them on the basis of its assets.

Transfer of their holdings in Hikal could adversely affect these shareholders and would be gross injustice to them, they have further stated in their affidavit.

“Any such relief, if granted, will open the floodgates to multiple actions/litigations by the minority public shareholders of this defendant as every single trade since the inception of this defendant by every single shareholder of this defendant would be vitiated by virtue of the share price being rendered artificially elevated retrospectively.

"The granting of any such relief by any court will in fact cause chaos in the securities market,” said BFIL in its affidavit in reply.

“It is a settled law that the personality of the company must be construed separate and distinct from its shareholders/persons through which such companies act.

"In such a situation, one cannot make the companies’ personality the same as that of persons involved,” KICL has said.

An email sent to Hikal, BFIL and KICL did not elicit any response.