InGovern Research brings up governance concerns at TD Power Systems
A Proxy Advisory Firm, InGovern Research, has raised corporate governance issues at engineering services company TD Power Systems. The report has been issued ahead of the company’s AGM on Wednesday 9th August 2023.
The Rs4,000 crore TD Power develops generators and motors for the electricity sector. InGovern has asked that the corporation should provide justifications for the dumping of major shareholdings by the promoters. The Proxy Advisor is also seeking full disclosures regarding the legal dispute with Vijay Kirloskar, as the company is also a litigant.
The advisory firm has directed shareholders to seek the appointment of an independent and reputable external entity to conduct a forensic audit of the company’s affairs and the conduct of the board.
On June 30, the promoters, which comprised Nikhil Kumar, Managing Director of TDPS, Khericha, Chartered Capital, Saphire Finman Services, and Hitoshi Matsuo, sold about 3.78 crore shares or 24.21 percent of the company’s total outstanding shares. percent of TDPS’s equity in an open market sale (partly through block deals) for approximately 800 crore.
Kirloskar, the chairman of Bengaluru-based Kirloskar Electric, had accused entities including Khericha and Kumar, of transferring approximately 2.51 crore shares of TDPS, a business he created in 1999.
The Director’s Report makes no mention of Kirloskar’s pending complaint for breach of trust and dishonesty on Khericha’s side, seeking an order to recover 2.51 crore shares of TDPS presumably held in trust for Kirloskar by Khericha and his family members.
The Karnataka High Court issued an ad-interim order on July 12 against several entities, including Khericha and Nikhil Kumar, Managing Director of TDPS and Kirloskar’s nephew, restraining them from transferring, encumbering, or creating any third-party rights in respect of the 2.51 crore shares claimed by Kirloskar. According to InGovern, Khericha, who is also the Managing Director of merchant banking Chartered Capital and Investment, has faced SEBI’s investigation for his role in RDB Rasayans’ IPOs, getting negative directives for the same.
