Stakeholders demand removal of S Kumars CMD Nitin Kasliwal

A group of stakeholders at S Kumars Nationwide, the owner of S Kumar’s brand has demanded removal of its chairman and CMD Nitin Kasliwal accusing him of mismanagement. A few shareholders led by Mumbai-based stockbroker Bharat Jayantilal Patel have issued a notice seeking extraordinary general meeting on April 27 to remove Kasliwal from his current position.

Despite most shareholders questioning the CMD's right to continue in office, lenders wanted Kasliwal to continue because of the corporate guarantee given to loans disbursed in favour of the company. The losses of the company, which owns textile brands such as Reid & Taylor, S Kumars, Bellmonte and Carmichael House, had reached Rs 414 crores as on March 31, 2013.

Kasliwal became promoter of S Kumars Nationwide in 2007-08 after the Kasliwal family divided assets among family members through a family split. Two brothers Abhayakumar Kasliwal and Shambhukumar Kasliwal founded the group in 1948. Shareholders have alleged that the company has plunged into a financial crisis due to ‘gross mismanagement’.

As per shareholders, the company has entered into financial crisis because of the mismanagement under the leadership of Nitin Kasliwal, which, in turn led to a number of winding up petitions filed by bankers and creditors. The shareholders have also said that a false impression about the company's strong performance was created among the general public by recommending a dividend for the year-ended March 31, 2012.

S Kumar’s suffered during a recessionary phase that hit the textile industry which led to oversupply of goods pushing up inventories. The company's working capital rose significantly, resulting in higher debt burden. The company's borrowing was at Rs 3,400 crores during the year ended March 31, 2013.