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Shareholders of <keyword id="149362" type="General" weightage="100" keywordseo="kirloskar" source="Orion">Kirloskar</keyword> Brothers Ltd have rejected a resolution for forensic audit of the affairs of the company by an external agency, according to a regulatory filing on Monday. On December 8, an extraordinary general meeting of the company's shareholders was convened following requisition by Kirloskar Industries Ltd (KIL) along with <keyword id="281440" type="General" weightage="50" keywordseo="atul-kirloskar" source="Orion">Atul Kirloskar</keyword> and <keyword id="659367" type="General" weightage="50" keywordseo="rahul-kirloskar" source="Orion">Rahul Kirloskar</keyword>, who together hold 24.92 per cent in Kirloskar Brothers Ltd (KBL), amid the simmering feud between Kirloskar siblings. The ordinary resolution was rejected with 63.99 per cent of votes against it while 36.01 per cent were in favour, the filing said. 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. KBL board had advised its shareholders to reject the resolution saying "the requisitionists are not justified in questioning the independence of the Independent Directors or the decisions of the board" to initiate legal proceedings to protect the interest of the company. The Kirloskar siblings, with KBL Chairman and Managing Director <keyword id="292658" type="General" weightage="50" keywordseo="sanjay-kirloskar" source="Orion">Sanjay Kirloskar</keyword> on one side and Atul and Rahul on the other, have been in a feud since 2016 over the deed of family settlement for the assets of the more than 130-year-old Kirloskar group. Rahul Kirloskar is the executive chairman of Kirloskar Pneumatic Co Ltd and Atul Kirloskar is the executive chairman of Kirloskar Oil Engines Ltd. 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. They had demanded that being a listed entity KBL should justify the rationale and basis on which it has been spending huge amounts aggregating to approximately Rs 274 crore towards payment of professional illegal expenses and consultancy charges ever since their dispute arose since on or about 2016. After being cleared of insider trading charges labelled against them by the Securities Appellate Tribunal (SAT), Rahul and Atul had raised questions over corporate governance of KBL. They were accused of insider trading when they sold shares of KBL to KIL back in 2010. They had accused KBL of "mis-utilising shareholder resources of a publicly listed company and misusing regulatory machinery" in the personal dispute of its Chairman &amp; Managing Director Sanjay Kirloskar. KIL had demanded that the audit must look into the conduct of the KBL board, especially the independent directors, on whether it has "verified the claims made by Sanjay Kirloskar in relation to the Deed of Family Settlement (DFS), in order to ensure that they have not been misled by the claims made" by the latter. In its rebuttal, KBL had said the legal fees over the last seven years were approximately Rs 70 crore, while a "major portion of the said Rs 274 crore is professional fees paid to various Indian and overseas reputed consultants to improve the company's business". SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/dalmia-bharat-to-acquire-cement-power-plants-of-jaiprakash-associates-for-5666-crore-enterprise-value/articleshow/96175228.cms">Dalmia Bharat to acquire cement, power plants of Jaiprakash Associates for ₹5,666 crore enterprise value</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/415-mn-indians-lifted-out-of-poverty-in-india-in-15-years-govt-says-quoting-undp/articleshow/96174443.cms">415 mn Indians lifted out of poverty in India in 15 years: Govt says quoting UNDP</a>

Kirloskar Brothers shareholders reject resolution for forensic audit

It’s been a month that India’s leading conglomerate <keyword id="121459" type="CITY" weightage="20" keywordseo="ITC-Ltd">ITC Ltd</keyword> has increased the prices of its cigarettes <keyword id="42407" type="ORGANIZATION" weightage="60" keywordseo="Navy">Navy</keyword> Cut and <keyword id="489337" type="UNKNOWN" weightage="20" keywordseo="Gold-Flake">Gold Flake</keyword>. And with the budget day nearing, the smokers enjoying the winter breeze are anticipating another hole in the pocket very soon. The heat of the hike in price was felt by the people who buy full packet as the price of Navy Cut packet, which has gone up by Rs 11 to Rs 89 now. <a href="http://www.businessinsider.in/chinas-tourism-is-much-ahead-of-india-hereswhy/articleshow/56719212.cms">ALSO READ: Why China is ahead of us in tourism?</a> 
 
While the sudden surge in the price hasn’t been explained much by the company, revision of prices is quite common in pre-budget season. 
The demonetization in November has affected the tobacco industry quite deep. Most road side sellers, for first few weeks, didn’t understand how to operate digital payments. And that served as a major setback for the industry. While cigarette is quite important from the economy point of view, doctor’s advice, healthy living and several anti-smoking drives have already unnerved the sector since last few years. 
 
If the prices go further up, which is very highly possible this time, the<a href="http://www.businessinsider.in/searchresult.cms?query=tobacco&amp;sortorder=effectivedate"> cigarette companies</a> would need to subsidize on the prices and incur some losses as usual. 
 
<a href="http://www.businessinsider.in/your-air-travel-might-get-expensive-after-the-budget-speech-in-february-heres-why/articleshow/56647465.cms">ALSO READ: Air travel to get dearer after GST</a> 
 The finance ministry is also ready with <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> rollout, which is now expected to go live on July 1. While cigarettes have been kept at 40% tax limit, experts believe, it should have been at 80%. Since these are a highly demerit product, <a href="http://www.businessinsider.in/searchresult.cms?query=tobacco&amp;sortorder=effectivedate">40% of GST</a> indicates need for Rs 1902 crore of excise tax per 1,000 sticks in order to make sure the revenue from cigarettes stay intact. 
 
“The taxation on tobacco should also be rationalized by a duty structure which is a mix of fixed and <a href="http://www.businessinsider.in/searchresult.cms?query=tobacco&amp;sortorder=effectivedate">ad-valorem</a> duty rather than only fixed duty component. By doing this, the Government will be able to generate additional revenue to the tune 20K-30K crore per annum which can be used for social and other activities and will also be discouraging the consumption of tobacco as per the WHO norms. Meanwhile alternative crop for tobacco farmers should also be given top priority, so as to keep their interest,” said <keyword id="67987" type="PERSON" weightage="20" keywordseo="Sanjay-Dalmia">Sanjay Dalmia</keyword>, Chairman of <keyword id="4095501" type="UNKNOWN" weightage="20" keywordseo="dalmia-group-of-companies">Dalmia Group of Companies</keyword> and also an expert in tobacco and pharmaceutical sector.

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Kirloskar Brothers shareholders reject resolution for forensic audit

PTI

Statutory Warning: Cigarettes to cost more after budget?

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