UPL whistleblower complaint update
Last updated: 11 Dec, 2020 | 09:28 am
Action: As of now there is no action required to be taken by you. We are keeping a close eye on the situation and shall update you in case of any action.
What is the issue?
- A whistleblower, who is a board member of UPL, has alleged that the company entered into rent deals with a shell company owned by its employees, and paid crores of rupees in rent to them.
- An ETPrime report has said that there were certain corporate governance issues with regards to the transactions done by UPL promoters. The issues were also raised in the past at the company’s board and to its former auditor SRBC & Co.
- The company has categorically denied these allegations. UPL said in a press release that an identical whistleblower complaint was received by the audit committee of UPL on June 2, 2017.
- The WhistleBlower Committee, with the help of an independent law firm, had concluded that those transactions were at arm’s length and in compliance with applicable laws, after duly investigating the issue in detail.
- The company further stated that the same whistleblower, motivated by malafide intentions, has approached the media raising the same issue again.
- UPL further confirmed that there is no new complaint against UPL.
UPL shares had come under pressure following the news yesterday, with the stock falling nearly 14% intraday. However, the stock has now stabilised following the clarifications issued by the company. In case the corporate governance lapses get proven, it will impact the company. We will keep you updated in case of any further details.
Despite the pandemic, UPL had reported a 165% on-year jump in consolidated net profit to Rs 537 crore for the September quarter, mainly due to a robust performance in the Indian market. The timely arrival of the monsoon leading to high groundwater levels, government support for Agri initiatives and very good progress in the sowing of the Kharif crop leading to a good output would continue to be tailwinds for the agro-industry.