Babasaheb Kalyani Counters Partition Suit by Nephew and Niece
Babasaheb Kalyani, the Managing Director of Bharat Forge, has refuted the claim of his nephew Sameer Jai Hiremath and niece Pallavi Swadi for partition of the Kalyani Hindu Undivided Family (HUF) assets. He argues that they are not part of the HUF under current law and therefore have no right to seek partition.
Kalyani's response comes in the form of an affidavit filed against the siblings' application for an ad-interim relief. The siblings had approached the court seeking a prohibition on Kalyani from conducting any transactions related to the HUF properties.
Kalyani contends that Hiremath and Swadi cannot be considered coparceners in the Kalyani joint family as they belong to the Hiremath family by birth. He further argues that the suit filed by the siblings is an attempt to usurp rights in the Kalyani HUF and should be dismissed due to their lack of legal standing.
The dispute centers around the ownership of Hikal Limited, a listed entity where the Baba Kalyani group holds 34% shares and the Hiremath family holds 34.84%. The remaining 31.15% is public shareholding. Last year, the Hiremath family moved the Bombay High Court claiming that Kalyani was not honoring a family arrangement to transfer all Hikal Limited shares to them.
Hikal Limited is a diversified company involved in the manufacturing of active pharmaceutical ingredients (APIs), crop protection, and animal healthcare. In FY23, it reported a total revenue of Rs 2,028 crore with a net profit of Rs 78 crore.
ICRA, a credit rating agency, has acknowledged the ongoing dispute and Baba Kalyani's resignation from his position as a director in Hikal. However, they have stated that the developments have not impacted the company's operations or banking arrangements. They will continue to monitor the situation and its potential impact on Hikal's credit risk profile.
Hikal has undertaken significant debt-funded capital expenditure for expansion in its pharmaceutical, animal healthcare, and crop protection businesses. This has led to an increase in their overall debt position. The company's animal healthcare facility was commissioned in December 2023, while the multipurpose crop protection facility is expected to be operational in the coming quarters.