UPL tanks 15% on whistleblower complaint; BSE seeks clarification

According to reports, the whistleblower has alleged that UPL entered into rent deals with the shell company owned by its employees. UPL has denied these allegations.

Shares of UPL slipped 15 per cent to Rs 416 on the BSE in intra-day trade on Thursday, on heavy volumes, following a media report that stated whistleblower claims the company’s promoters siphoned off money. 

Clarifying on the news report, UPL has said that the company believes that there is a sustained campaign to malign its image and the group and it is important that the correct picture is presented to all its stakeholders as the news report seems to create an unseemly controversy about corporate governance at UPL.

UPL denies the whistleblower is a member of the board, as reported in the news article, as these allegations were discussed and investigated by the Audit Committee and the Board in 2017/2018, the company said.

UPL further said it believes and reassure that all corporate governance norms and applicable laws have been duly complied with. UPL will evaluate all possible legal options available with it to defend its position and image, it said. CLICK HERE FOR FULL REPORT.

At 01:54 pm, UPL was trading 13 per cent lower at Rs 428 on the BSE, as compared to 0.71 per cent decline in the S&P BSE Sensex. A combined 70.6 million equity shares representing 10 per cent of total equity of UPL changed hands on the NSE and BSE.

Meanwhile, in December, UPL outperformed the market by gaining 18 per cent, as compared to a 4 per cent rise in the S&P BSE Sensex till Wednesday. Between November 17 and November 25, 2020, Uniphos Enterprises, the promoter group company, had purchased 179,475 equity shares of UPL from open market purchases, according to disclosure made by the company to stock exchanges. Post transaction, Uniphos Enterprises' holding in UPL increased to 5.108 per cent from 5.085 per cent earlier.

UPL is one of the top five agriculture solutions companies worldwide, with portfolio consisting of biologicals and traditional crop protection solutions with more than 13,600 registrations.

The company has maintained its guidance of 6-8 per cent growth in revenue and 10-12 per cent in EBITDA (earnings before interest, taxes, depreciation, and amortization) for financial year 2020-21 (FY21). The growth, UPL said, will be driven by a focus on differentiated solutions as well as new product launches. Price increases in local currencies and cost savings will support margins, UPL said while announcing September quarter results on October 30.

As of September 30, 2020, UPL's net debt stood at Rs 23,841 crore, higher by Rs 1,781 crore compared to March 31, 2020 mainly due to an increase in working capital of Rs 2,915 crore, in line with the seasonality of the business. The management, reports suggest, remained committed to reducing net debt in H2 and maintaining an investment grade credit rating.