UPL: Whistled out
Shares of UPL slumped 12% to Rs 433.15 apiece on NSE after a whistleblower alleged that the promoters have siphoned off money.
The whistleblower alleges that UPL entered into rent deals with the shell company owned by its employees and paid crores of rupees in rent for properties held by the latter, which was earlier owned by UPL chief Jaidev Shroff himself, an ET Prime report said.
Going by the details submitted by the whistle blower, there seem to be certain corporate governance issues with regards to transactions done by promoters of UPL.
However, the agrochemicals maker has denied of any wrong doing. The board has not received any whistleblower complaint. There is access to all information including legal opinion. The company has given all necessary clarifications.
A whistleblower – who is a board member, has alleged that the UPL’s Chief Executive Officer (CEO) – Jaidev Shroff & his family have been using shell entities to systematically divert funds of UPL for their personal gain, by means of various related-party transactions & dubious deals.
Shroff’s comments in a media (CNBC-TV18) interaction – that the auditors have reviewed the transactions related to rental agreements mentioned by the whistleblower, & that the matter was put to rest in 2017 – did not seem to pacify investors/market participants.
Several other dubious transactions by shell corporations associated with UPL, it’s employees, & promoters – have been flagged in the whistleblower complaint.
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