SEBI has cautioned Rahul Kirloskar, one of the promoters of Pune based Kirloskar Brothers, for erroneous disclosure regarding his education qualifications.

For years, Kirloskar had stated in public records, mainly in company annual reports, that he had Mechanical Engineering degree from the US. It has now come to light that such a disclosure was erroneous. After a few shareholders raised the issue with group companies where he is a board member, Kirloskar in a letter dated January 21, 2019 told SEBI that his “education qualifications were erroneously stated in public domain.” Similar disclosures were also made in the company’s annual report.

In a letter titled ‘Erroneous disclosure regarding your own educational qualification’, SEBI advised Kirloskar to be “cautious in future and ensure such erroneous disclosures are not made to the company or to the stock exchanges.”

SEBI further stressed upon Kirloskar to ensure that a copy of its letter was placed before the companies where he was presently on board and also before the shareholders’ at the next AGM of the respective companies.

Kirloskar did not respond to three email queries sent on June 28, July 9 and July 22. Two companies — Kirloskar Industries and Kirloskar Ferrous Industries, made a disclosure about the SEBI letter to the stock exchanges on July 19. BusinessLine is in possession of a copy of the SEBI letter.

Misrepresentation of facts or providing misleading information is a breach of SEBI (Listing Obligations and Disclosure) Regulations, 2015, a lawyer said.

Corporate governance issue

“Misstatement of educational qualification of a company director is a grave corporate governance issue. Shareholders have invested in a company thinking that the directors are well qualified to run it and later after years it comes to light that the directors made false claims,” said Vishwanathan Iyer, lawyer, Bombay High Court, who appears in SEBI and exchange-related cases.

Misstatement of educational degree is considered a serious matter in the stock markets globally. Some infamous cases of global regulators taking action against senior company executives for misstatement of educational qualification include Scott Thompson, CEO, Yahoo!; David Tovar, former V-P — Corporate Communications, Wal-Mart; Ronald Zarrella, former CEO of Bausch & Lomb; Jeffrey Papows, former president, IBM’s Lotus Development; Gregory Probert, former CEO of Herbalife; David Geffen, billionaire entrepreneur, and Sandra Baldwin, former president and chairperson, US Olympic Committee.

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