UPL rubbishes media report of promoters siphoning off money

The agrochemical company said it will evaluate all possible legal options available with it to defend its position and image.

Shares of the agrochemicals maker tumbled 10.94% to settle at Rs 438.45 on Thursday (10 December) after a whistleblower reportedly alleged that the promoters of UPL had siphoned off money. According to the media report, the whistleblower alleged 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. The whistleblower also claimed that shell entities were used to carry out other illegal transactions, the report added.

UPL issued a clarification during trading hours today, 10 December 2020, stating that there is a sustained campaign to malign the image of the company and the group. The news report seems to create an unseemly controversy about corporate governance at the company.

UPL denied that the whistle blower 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.

An identical whistle blower complaint was received by the audit committee of UPL on 2 June 2017. The whistle blower committee, which comprised only independent directors, was constituted by the audit committee to investigate the allegations and all the contents of the complaint was fully disclosed. It undertook a detailed review, including each related party transaction (RPT), with the help of an independent law firm, and had concluded two and half years back that those transactions were at arm's length and in compliance with applicable laws. Thereafter, the complainant was duly informed about the findings of the audit committee and the matter was closed.

"It appears that the same whistle blower, motivated by malafide intentions, has approached the media raising the same issue again," the company said. It confirmed that all transactions in question were on arms-length basis and that there has been no siphoning of funds, as alleged in the news article; and there is no new complaint against the company.

UPL reassured that all corporate governance norms and applicable laws have been duly complied with and it will evaluate all possible legal options available with it to defend its position and image.

UPL is a global provider of sustainable agriculture products & solutions. On a consolidated basis, the company posted a 166% jump in net profit to Rs 537 crore on a 14.35% rise in revenue from operations to Rs 8,939 crore in Q2 September 2020 over Q2 September 2019.

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