Baba Kalyani’s son seeks board seat again but aunt may oppose

MUMBAI: The ownership dispute between Bharat Forge chairman and MD Baba Kalyani and his sister and Hikal non-executive director Sugandha Hiremath over the chemicals company has escalated. Baba’s son Amit Kalyani is seeking re-election as a non-executive and non-independent director at Hikal. His reappointment, under an ordinary resolution, requires a majority of votes to be cast in his favour. Amit (50) has been on Hikal’s board for 13 years. Sugandha and her family, who own about 35% of Hikal, are expected to vote against her nephew’s reappointment. In Dec 2023, Baba exited the board after failing to secure required shareholder votes, ending a 31-year tenure at the chemicals company. Sugandha and her family had voted against Baba’s reappointment at that time. The remote e-voting on Amit’s reappointment will conclude on Monday. The results will be declared on Tuesday after the AGM e-voting closes that evening. Baba and his family own 34% of Hikal and are expected to back his son’s reappointment. The remaining 31% is held by non-promoters. It will be interesting to see the stance taken by institutional and retail investors on Amit’s directorship. In Sept 2024, Sugandha’s board reappointment was approved with the backing of institutional and retail shareholders, despite Baba and his family voting against it. Shareholder advisory firms have taken different positions on Amit’s reappointment – SES recommended voting in favour of his reappointment, while IIAS advised against it. “We note that the promoters (Hiremath and Kalyani factions) are involved in a dispute regarding Hikal’s ownership. We expect them to relinquish their board positions, resolve the ownership dispute and then seek (re)appointments to the board again so as not to impact the overall functioning and decision making…and to shield the larger shareholder interest from a prolonged promoter dispute,” said IIAS.In July, Amit resigned as an independent director on Schaeffler India’s board, citing “other professional commitments.” Apart from Hikal, Amit serves on the boards of Bharat Forge, Kalyani Steels and three other companies. “So far, we have been raising concerns about Amit’s excessive time commitments…but he now holds six listed directorships. Although these six positions may seem stretched, since they are all within the common promoter group, we do not have any major concerns regarding the time commitments,” said SES.Hikal was established by Sugandha’s husband Jaidev Hiremath with seed capital from her and Baba’s father for a manufacturing facility in Maharashtra. In return, Hikal shares were issued to Surajmukhi – an entity owned by their father – with the understanding that the shares would be transferred back to the Hiremaths. According to Sugandha, Baba did not fulfill his obligation under the family arrangement to transfer his 34% in Hikal to her. She then took the matter to the Bombay high court, where it is scheduled for a hearing in Oct. Baba, however, has dismissed the share-transfer clause.