Shares of UPL Ltd, a Mumbai-based agrochemical company promoted by the Shroffs, fell as much as 15 per cent on the stock exchanges on Thursday following media reports of allegations by a whistleblower about fund diversion by the promoters.
The whistleblower alleged that UPL entered into rent deals with a shell company owned by its employees and paid rent for properties held by them.
The shares closed the day 10.94 per cent down at Rs 438.45 on the BSE even as UPL said “there is a sustained campaign to malign the image of the company and the group”.
UPL, one of the largest generic agriculture solutions companies, with a portfolio consisting of biologicals and traditional crop protection solutions, said in a statement to the exchanges that these allegations were discussed and investigated by the Audit Committee and the board in 2017-2018.
An identical whistleblower complaint was received by the audit committee of the company on June 2, 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 said.
“This complaint was made in 2016-17 from a board member, it was made by my estranged wife, about the house that I live in and this is rented on an arm’s length basis to UPL for my residence,” UPL CEO Jaidev Shroff told CNBC-TV18.
“Business is very strong, UPL has great growth opportunities. There is no fresh complaint that the auditors or management have received. KPMG is our global auditor and it has not resigned,” the UPL CEO told the news channel.
According to the UPL statement, the company 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, the company stated.
UPL said all transactions in question were on arms-length basis and that there has been no siphoning of funds. It said there is no new complaint against UPL and reassured investors 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,” UPL said in a statement.
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