Hiremath claims a third of Baba Kalyani family fortune including Bharat Forge shares

Mumbai: There’s a new twist in the ongoing feud between Babasaheb Kalyani, the billionaire promoter of Kalyani group, and his sister Sugandha Hiremath. In a recent court filing, Hiremath has laid claim to a third of all Kalyani family assets, including shares of listed group companies such as Bharat Forge and Kalyani Steels, and private assets like land, real estate and jewellery.

In the petition, which was filed on 28 September before the Pune Civil Court that is not public and that Mint has seen, Hiremath claimed she recently came to know of a Kalyani Hindu Undivided Family (HUF) that funded the creation of all the group’s businesses that exist today including group flagship Bharat Forge. The Kalyani HUF has existed since the time of her grandfather Annappa Narayan Kalyani, she said in her petition.

Thus, she has argued that all the assets of the Kalyani Group today belong to this HUF, of which she has claimed a third. Listed Kalyani group companies have a combined market capitalisation of over ₹70,000 crore.

In an earlier suit that Hiremath had filed in 2012 against her late father Neelkanth Kalyani and her brother Babasaheb, she had sought to be made a co-parcener of the Neelkanth Annappa Kalyani (NAK) HUF, which she has now claimed she was misled into believing was the only HUF of the family.

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Separately, Hikal Ltd, the company co-promoted by the Hiremath family, has also made public a family agreement between Babasaheb and his father Neelkanth Kalyani that mentions that the shares of Hikal held by the Kalyani group are to be transferred to Hiremath.

Kalyani Investment, a listed company that holds 31.36% stake in Hikal, has disputed the veracity of this agreement.

Both companies have cited letters from late Narayan Vaghul, the former chairman of ICICI Bank in their filings. Hikal has submitted a letter from Vaghul to Sulochana Kalyani dated January 2012 that mentions the existence of the agreement between the Kalyani kin to transfer Hikal shares to Sugandha Hiremath.

However, Kalyani Investment has produced a letter from Vaghul to the siblings dated June 2023 in which he said that his 2012 letter was not meant to confirm the “correctness of the content of the note”.

Also read | Kalyani family dispute: Gaurishankar files documents to show HUF exists, belying brother’s exclusive claims over assets

“Willful suppression of this letter of Mr. N. Vaghul by Mr. & Mrs. Hiremath is done with a sole intention to create false market in the securities of our Company and also of Hikal and this constitute a serious offence under Sebi (Prohibition of Fraudulent & Unfair Trade Practices relating to Securities Market) Regulation 2003,” Kalyani Investment wrote in its intimation to the bourses.

Queries sent to Sugandha Hiremath and Babasaheb Kalyani did not elicit a response by press time Monday.

Tushar Kumar, Advocate, Supreme Court of India clarified that introduction of regulatory scrutiny into an already convoluted familial dispute could result in overlapping adjudications and public exposure of sensitive family dynamics.

“From a strategic vantage point, the disclosure of these family agreements could exert moral or legal pressure on the disputing parties to adhere to the terms of the agreements,” he said.

Amit A. Tungare, managing partner at Asahi Legal, said that the disclosure of family agreements to stock exchanges has introduced a significant market transparency dimension to what was traditionally viewed as private family litigation, adding that regulatory disclosures could impact market valuation and investor confidence.

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“Inconsistencies between court submissions and market disclosures could complicate both proceedings,” he said.

In March 2023, Sugandha and her husband Jaidev Hiremath had moved the Bombay High Court against Babasaheb Kalyani, seeking specific performance of the 1994 family agreement and transfer Hikal shares held by the Kalyani group to Sugandha.

Currently, the Hiremath family owns about 34% stake in Hikal and are co-promoters of the company. Babasaheb controls another 34% stake in the company through two listed firms—Kalyani Investment Company and BF Investment.

Hiremath’s U-turn

Hiremath’s petition to the Pune Civil Court last September is a complete reversal of her position on the existence of a Kalyani HUF. Earlier, in a written statement to a suit of 2014 filed by Sheetal Kalyani in the same court, she had claimed that NAK HUF was the only such entity within the Kalyani family.

Now, her petition claims she was misled by her brother Babasaheb into believing that the NAK HUF was the only one HUF within the Kalyani family. The only assets of this HUF were a property in Yerawada in Pune, she was made to believe, she claimed in her application.

However, she has now claimed in the 28 September petition that upon investigation, she has “realized that the HUF of the Kalyani family has been in existence since the time of her grandfather Shri Annappa Narayan Kalyani, who himself was holding ancestral properties and funds”.

Also read | Kalyani family feud could take a fresh turn as a crucial will surfaces

Hiremath further claimed that it was only after Babasaheb tried to “usurp” Hikal from her family that she realized that he “had no intention to look after anyone’s interest but his own” and that he “would go to any extent to deprive his siblings and family members of their share in the family’s assets”.

The Feud so far

The genesis of the feud lies in a purported family agreement that Hikal made public on Monday. As per the agreement, Babasaheb was to transfer Hikal shares to Sugandha Hiremath. However, when the Kalyani group holding firms tried to increase their stake in Hikal in 2023, the Hiremath family saw it as an attempt to take away the control of the company from them, prompting them to move the Bombay High Court.

The discord has since turned into a bitter feud involving a maze of suits and countersuits. The family of Gaurishankar Kalyani, the younger sibling of Babasaheb and Sugandha, has also moved the Pune Civil Court seeking implementation of a will by late Sulochana Kirloskar, the mother of the three siblings who passed away in 2023.

Tungare called the convergence of partition suits, cross-claims, and regulatory oversight “a complex matrix of legal proceedings”. He said that while regulatory compliance may appear to add another layer of complexity, Sebi’s disclosure requirements serve a distinct market-oriented purpose separate from the adjudication of family property rights.

And read | Bharat Forge’s Baba Kalyani plans to sue his sister and Hiremath siblings in feud over family wealth

The concurrent disclosure of family agreements by both Hikal and the Kalyani entities suggested a deliberate legal strategy to Tungare as it established a public record of competing claims that may prove valuable in future proceedings.

Tungare also believed bringing disputes into regulatory domain could potentially incentivize settlement discussions as listed entities generally prefer avoiding prolonged regulatory scrutiny.