Kirloskar group companies challenges SEBI disclosure norms in court
In a dramatic escalation of the long-running Kirloskar family dispute, five listed Kirloskar Group companies have moved the Bombay High Court challenging the constitutional validity of a regulation that mandates disclosure of private agreements by promoters, directors, and other stakeholders. Kirloskar Oil Engines Ltd (KOEL), Kirloskar Ferrous Industries Ltd, Kirloskar Pneumatic Company Ltd, Kirloskar Industries Ltd, and GG Dandekar Properties Ltd have individually filed writ petitions challenging regulations laid down by the Securities and Exchange Board of India. As per these Companies, SEBI’s disclosure rules were "manifestly arbitrary", "disproportionate", and "impermissibly retrospective". They argued that the regulator had overstepped its mandate by effectively compelling listed companies to treat third-party agreements—including those they may not have signed or ratified—as binding and material.
The Bombay High Court has sought SEBI’s response and is expected to hear the matter on 20 August. The outcome could have wide-ranging implications for corporate disclosures, particularly for companies with complex ownership or family-led structures. The petitioners have contested Regulation 30A and Clause 5A of Para A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as well as SEBI circulars dated 13 July 2023 and 11 November 2024, which operationalised these rules.
