Another family fight breaks out at Apollo Tyres.
Family disputes are not new at Apollo Tyres Ltd. (ATL) or for its Chairman and Managing Director Onkar Singh Kanwar. Back in 1995, Kanwar was locked in battle with his father, Raunaq Singh, from whom he was trying to wrest control of the company. Now, one of Kanwar’s brothers, Narinder Jeet Singh, is accusing him of misusing the company’s funds to further increase his control over the tyre company, whose turnover recently crossed the magic $1-billion mark.
Singh’s petition, filed with the southern bench of the Company Law Board (CLB), says: “The affairs of the company are being conducted in a manner so as to deceive the shareholder and the funds of the company are being utilised for ulterior and illegal purposes to make investment in such a manner that the control of Apollo Tyres is concentrated in a few hands, i.e. O.S. Kanwar and his family members.”
Currently, promoters control 32.43 per cent of Apollo Tyres (ATL) and Onkar Singh’s two sons Neeraj Kanwar, who’s Joint Managing Director & COO, and Raaja Kanwar, who’s a director, sit on the board of the company.
Singh’s complaint is a throwback to mid-90s when Raunaq Singh, founder of ATL and several other businesses, made similar charges against his son Onkar Kanwar Singh, who has since turned the tyre company into the most successful of the family’s businesses. Other family businesses (run by Kanwar’s siblings)—with the exception of Bharat Gears—seem to be languishing. Narinder Jeet is believed to control poor-performing Panchshila Rubbers, which used to be a supplier of tyre tubes to ATL.
His petition seeks investigation into the affairs of several “dummy” investment companies of ATL, which have allegedly got unsecured loans from Apollo Tyres to fund purchases of the company’s shares. On its part, Apollo Tyres has challenged the petition’s validity on the ground that the petitioner must have a shareholding of at least 10 per cent in order to be able to bring such a complaint to the CLB, while Kanwar, when contacted by Business Today, said he wouldn’t comment on a matter that was sub judice.
Anil Agarwala, a Delhi-based advocate who argues company law cases in the CLB and the Supreme Court, says the 10 per cent shareholding requirement is indeed there in the law, but there might be “a number of other factors, such as the petitioner in such a case also alleging that he was wrongly eased out of the shareholding”.
Meanwhile, in another petition filed with the CLB, the All India Tyre Dealers Federation (AITDF), has not only accused ATL of engaging in illegal trade practices but also charged the domestic tyre industry (dominated by 5 players: MRF, Apollo, CEAT, JK Tyre and Birla Tyres) of cartelisation and price rigging.
What happens next would depend on the CLB but, for the moment, another family spat coming out into the open could make things embarrassing for Kanwar and his company.