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Kalyani may face tough Hikal board re-election – Times of India


MUMBAI: As Bharat Forge chairman and MD Baba Kalyani and his sister, Sugandha Hiremath, battle over the existence of a nearly 30-year-old ‘family arrangement’ which is crucial to the ownership dispute in Hikal, Baba may not be able to hold on to his board seat at the chemical company after he turns 75 next month.
Baba is seeking re-election as Hikal’s non-executive, non-independent director at the company’s ongoing postal ballot process, which will end on December 24. For Baba to continue as a director beyond 75, a special resolution needs to be passed by Hikal’s shareholders. The resolution needs 75% of the votes cast in its favour.
Sugandha, who owns about 35% in Hikal (see graphic), is expected to vote against Baba’s reappointment, given the legal fight between the two. She had moved the Bombay high court over a family arrangement that stipulated Baba to transfer his 34% stake in Hikal to her. Baba has dismissed the share-transfer clause.

Screenshot 2023-12-23 071117

Non-promoters own 31% in Hikal, which has a market capitalisation of Rs 3,748 crore. It will be interesting to see the stand taken by institutional and retail investors in this matter. Two shareholder advisory firms have recommended to vote in favour of Baba’s reappointment, while one has suggested otherwise. “We recognise that the promoters are currently involved in a dispute regarding the company’s ownership. The board must ensure that this family dispute does not impact overall functioning and decision-making. Notwithstanding, we do not consider age to be a criterion for board memberships,” a report by Institutional Investor Advisory Services said.
Stakeholders Empowerment Services said: “Though the time commitment of Baba appears to be excessive, his directorships are within the same promoter group of companies and therefore, no concern is identified.” Apart from Hikal and Bharat Forge, Baba is on the board of more than seven companies.
However, given the dynamics of the voting structure, Baba’s continuation on the board of Hikal remains doubtful. If that happens, his 31-year association as a director of the company will come to an end. His son and Bharat Forge’s deputy MD Amit Kalyani, however, remains on the board of Hikal, which was set up by Sugandha’s husband Jaidev Hiremath. So is Baba’s long-time associate Shrikrishna Adivarekar, who has been on the board of Hikal since 2021.
Hikal was established by Jaidev with seed capital from Sugandha 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 these shares would be transferred back to the Hiremaths. In recent months, Baba has sought to buy Hikal shares from the open market to increase his shareholding. But Hikal has disapproved the move citing that Baba and his family were privy to inside information.


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