Kirloskars ‘land’ in trouble in the South

New Delhi: A peculiar problem has hit the Kirloskar family in South India, triggering a huge controversy within the group.

The Mysore Kirloskar factory will now be shut down and land handed over, after it was made clear to the estimated 2,000 workers that former chairman of the company, Vikram Kirloskar—now the president of the New Delhi-based Confederation of Indian Industry (CII)—has sold the property to a builder.

Reports reaching the national capital say the workers are now stranded and left to suffer the consequences that will follow the sale of land to the builder. Worse, a large number of managers of Mysore Kirloskar, who were staying in staff quarters are wondering where to go following the recent decision by the management.

For the records, Kirloskar is the CMD of Kirloskar Systems Ltd, and Vice Chairman of Toyota Kirloskar Motor. But what is interesting is that Kirloskar had relinquished his post—much before the land issue snowballed into a huge controversy—and handed over the baton to his uncle, Sham Kirloskar, and nominated him as the managing director of the company.

Sources within the company have told this reporter that Vikram Kirloskar’s move to exit and hand over the reins to Sham Kirloskar was to move away from the controversies slowly, yet steadily, gripping the company. Interestingly, Vikram Kirloskar became the MD of Mysore Kirloskar Ltd., at Harihar in 1983, which manufactured lathe machines. The company, which started way back in 1941, had a glorious past and manufactured machine tools during World War II and provided employment to hundreds of people. The factory, which once employed over 3,000 workers and earned huge amounts of foreign exchange, eventually scaled down its operations and declared a layoff in 2000.

But when the company went to the now-defunct Bureau of Industrial and Financial Reconstruction (BIFR), the land was sold without informing the workers. The managers, who were living in the staff quarters, were promised that they would not be disrupted and the buildings would be allocated to them. Selling property while the liquidation process is on is not permitted under the Indian property laws.

But once the land was sold, the workers and the managers went to court to seek justice. The workers told the court that there were 198 acres of land, main foundry, and some buildings. The workers were not aware of the cost at which the land was sold by Vikram Kirloskar.

Vikram Kirloskar got the board to appoint his uncle Sham Kirloskar, 70, as the MD of the company in 2000, around the time the crisis was full blown and the liquidation process had started. The government finally appointed a liquidator in January 2004 and Sham Kirloskar was made to answer queries of hundreds of workers, and their families. Now, Sham Kirloskar is saddled with the huge crisis and will have to continue to face the various litigation processes even as cousin Vikram Kirloskar advises—as head of CII—the government on various policy issues.

Repeated attempts by this reporter to reach both Sham and Vikram Kirloskar through e-mails failed to elicit any response.