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Kirloskar Brothers Ltd promoter votes against reappointment of independent director

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Mumbai: The Kirloskar family feud took a surprise twist when Kirloskar Industries Ltd (KIL), a promoter of Kirloskar Brothers Ltd (KBL), voted against the re-appointment of an independent director to KBL’s board during its AGM on Friday citing mistrust of the director’s independence and impartiality.

The resolution to re-appoint Kishor Chaukar on the board of Kirloskar Brothers was blocked with only 65.7% votes in his favour. Re-appointment of an independent director is a special resolution and needs 75% of shareholder votes to pass.

KIL, which holds a 23.9% stake in KBL, also voted against the resolutions to re-appoint Alok Kirloskar as a non-independent director and to appoint MS Unnikrishnan as an independent director, but these, passed as ordinary resolutions, need only 50% votes in favour.

“The entire Kirloskar family other than Sanjay (and his immediate family) has voted against the appointment of Mr. Chaukar. The correspondence engaged by Mr. Chaukar with one of the promoters (of KIL) created suspicion about his independence on the board of KBL,” read a statement from KIL.

An email sent to Sanjay Kirloskar for comment remained unanswered till press time Monday.

This is the latest development in the ongoing feud amongst the fourth generation of the industrialist family with Sanjay Kirloskar on one side and his brothers Atul and Rahul and the rest of the family on the other.

Sanjay, the second son of Chandrakant Kirloskar, is the CMD of KBL. Elder brother Atul Kirloskar is the chairman of KIL.

Chaukar’s 5-year term as an independent director of KBL ended on 26 April this year. The company passed a resolution on 22 April to appoint him as an additional director in the category of independent director with effect from 27 April till the conclusion of the ensuing AGM.

KIL had sent a letter to KBL and the registrar of companies on 12 May in which it said that calling it an “appointment” as an additional director rather than a “re-appointment” was against the Companies Act, 2013. ET has seen a copy of this letter.

Chaukar responded saying KBL would follow due process and pass a special resolution for his re-appointment as an independent director during the subsequent AGM. He also referred to the private deed of family settlement between the brothers in his reply.

The mention of the DFS was the bone of contention for KIL, said a person aware of the development asking not to be named. “This was the first red flag raising concerns about his impartiality. Mr. Chaukar went on to request Rahul and Atul Kirloskar’s support for his reappointment in light of alleged commitments they had made to their brother, Sanjay – rather than on the basis of his own credibility and independence,” this person said.

However, independent observers were unconvinced by KIL’s argument.

“Sitting outside the boardroom we don’t know what the dynamics are,” said an executive at a proxy advisory firm. “Till there’s a family settlement, you should expect such hostilities.”

KIL abstained from voting on other resolutions apart from the three related to a change in directorate during Friday’s AGM, data from the exchanges showed. In the preceding two years, it abstained from voting on any resolution.

In August, Rahul Kirloskar wrote to the chairman of the Securities and Exchange Board of India (Sebi) alleging foul play when a December 2019 show-cause notice (SCN) sent to some promoters of KBL, including himself, was leaked in the media.

“The pattern of these articles emerging once again and its timing now makes us wonder if there is a nexus between Mr. Sanjay Kirloskar and some officers in Sebi, who seems to be aware of the exact progress of our SCN,” Rahul said in that letter.

In 2010, Atul, Rahul and four other family members sold their stakes in KBL to KIL. An investigation by the market regulator on grounds of insider trading in this matter is ongoing.





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My brother owes $10K to our late father’s estate. There’s no loan agreement and I’m executor. How should I approach repayment?

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Dear Quentin,

My father passed and I am the executor of his will.

We sold the house and Dad’s assets with my brother’s help. Probate is done. We are ready to distribute the remainder of my father’s estate, but my brother owes the estate $10,000.

He feels that if he had paid this money back before Dad passed, he would still get half back, and therefore owes $5,000. (Dad also told me that he owed the money before he passed.)

My father’s will says his estate should be split 50/50. I feel my brother owes $10,000 to the estate. I do not want to rock the boat, and will do the right thing in order to keep peace.

What is the proper way to split $200,000 in cash when he owes the estate $10,000? For the record, my brother will abide by whatever I decide. Thank you in advance for your help.

Trying to Do the Right & Proper Thing

Dear Right & Proper,

You are right to not look for trouble where there is none.

Given that there is no notarized loan agreement between your brother and your late father and there is money to be distributed, it would seem simpler and faster to have him sign a note now saying he owes the estate $10,000 and deduct the $5,000 from his eventual inheritance. Done and done. He could, after all, say that the loan was only due to be repaid when your father was alive or, indeed, say the loan was a gift. (The subject of countless episodes of “Judge Judy.”)

Your story is a cautionary tale of what could go wrong. “A hug or a handshake is not sufficient to bind someone to loan repayment. Loans and repayment obligations should be spelled out in writing and include repayment terms upon the testator’s death,” according to the Absolute Trust Counsel, a California law firm. “It is the responsibility of the executor to collect the balance due. An estate cannot be settled until all loans are collected and all debts settled or paid.”

“When an estate is insolvent, the collection of outstanding loans becomes especially important. Creditors want to be paid and will pursue all available resources to accomplish that,” the firm adds. “Many times, unpaid loans create dissension among heirs. In some cases, heirs who owe money still expect to receive an equal share of an estate.”

There is a healthy cash sum from which to deduct your brother’s loan: $105,000 for you and $95,000 for him. It could get sticky otherwise.

Thankfully, your brother also wants to do what’s right and proper.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

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These money and investing tips can help you sail the stock market’s choppy seas

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Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, give you tips about how to navigate the financial markets after February’s bumpy second half and signs pointing to March blowing in with more unpredictable winds.



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This 57-year-old said ‘screw this’ to San Francisco — and retired to ‘delightful’ Albuquerque, where she slashed her expenses by 70%

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When Roberta Reinstein moved to the Bay Area roughly 30 years ago to go to law school, it felt to her like a different place than it does now.

“It was possible for a student to live there…it was filled with artists,” she says. But Reinstein, 57, watched as real-estate prices skyrocketed (in just the past decade or so, home values have nearly doubled, according to Zillow) and many artists and less wealthy people had to move out. Nowadays, “San Francisco is only for the wealthy — the super wealthy — unless you’re willing to live with five roommates,” she jokes.


Do you have an interesting retirement story? Email helpmeretire@marketwatch.com with your story.

As she was watching San Francisco become a hub for the rich, she had a financial setback of her own: a divorce, in which she and her spouse had to split up their assets. And the divorce necessitated she move out of the family home, so she was spending $4,000 a month on a tiny pad to share with her daughter, Eva, she says.

“When Eva was in high school I started to think, do I really need to be here? There are lots of other places I can go.” And the more she thought about it, the more she realized: “Screw this, I gotta get out of here,” Reinstein says with a laugh. “I was ready for a break from the high cost, crowds and Google-fueled insanity of the Bay Area.”

Plus, she loved to flip houses (she’d done a couple in California years ago, before the real-estate prices were so high) and knew that was out of the question for her to do in the Bay Area — so she and her new partner, Peter, considered where else they could live. “We thought for a microsecond that Arizona might be the place, but it was way too hot in the summer.”

Roberta Reinstein and her partner, Peter.


Roberta Reinstein

They settled on Albuquerque for a number of reasons, including the weather, affordability of real estate, access to outdoor activities and the fact that Reinstein’s best friend had recently moved there.

Here’s what life is like in ABQ.

The area: Though it’s perhaps best known for its annual hot-air balloon festival and being the setting for AMC’s hit show “Breaking Bad”, ABQ — which has a population of roughly 550,000 — has a lot more going for it than that. “Albuquerque is a delightful, quirky hidden gem,” says Reinstein.

The Albuquerque Skyline at dusk.


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It’s an artsy spot — there are hundreds of galleries and art studios; monthly art crawls, and a robust performing-arts scene — and a city where outdoor enthusiasts flock to. That’s helped along by the miles of hiking and biking trails in the adjacent Sandia and Manzano Mountains, as well as the roughly 300 days of sunshine. (Though January average lows are in the mid-20s, and July highs hit the low 90s.) And Reinstein tells MarketWatch she loves that it’s a diverse city with its own unique cuisine and celebrations.

Of course, there are downsides: Overall crime is high, though Reinstein says that while there are some not-so-desirable neighborhoods, there are plenty of areas that are safe. She adds that she’s never been the victim of a crime other than someone stealing a hose from one of the homes she was flipping. And there is “a fair amount of poverty,” says Reinstein. Plus, she says, the city can feel like it has a lot of sprawl, and she misses great Asian food.

View of the mountains from Reinstein’s yard


Roberta Reinstein

Here’s what MarketWatch recently wrote about Albuquerque.

The cost: Though Reinstein doesn’t keep a strict budget, she estimates that she probably spends about $3,000 a month to live in Albuquerque — despite having pricey hobbies like owning two horses — it costs her $1,250 a month to board them, which is her most significant expense. She says that most things are cheaper in Albuquerque than they were in San Francisco, including energy and gas, and estimates that she spends roughly 70% less a month than she did in the Bay Area.

Reinstein at the nearby stables.

The biggest way she saves money is by not having a mortgage on her home: She bought the four-bedroom, three-bath home that sits on an acre of land for $240,000, using a combination of savings, her divorce settlement and proceeds from homes she bought and flipped in Arizona and New Mexico, she says. And she adds that you can get a “nice house in a decent neighborhood for under $200,000” with smaller homes to be had for $100,000 or so, and can rent a nice place for $700 to $800 a month. Plus, she drives an older car — “a ratty Toyota Tundra truck” — she explains, so she doesn’t have a car loan.

The sitting room in Reinstein’s home.


Roberta Reinstein

Indeed, the cost of living and property taxes in Albuquerque are slightly below average for the U.S., median homes cost under $200,000, according to Sperling’s Best Places — and you can read about New Mexico’s tax situation here.

The bottom line: Reinstein says she plans to stay. “People are super friendly,” she adds, noting that it’s easy to make friends and get involved in things here. She’s part of a ladies walking group in the neighborhood and has made friends from her barn. “I have like two people I still correspond with [from the Bay Area],” she jokes, adding that “I was so wrapped up in my own world there.” But in ABQ, she says: “I had to go back to managing my schedule because I can’t get stuff done. I have so much to do here.”



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