UPL shares tank on whistle-blower claims

Mumbai: Shares of agrochemical company UPL plunged up to 15 per cent on Thursday after ET Prime cited whistle-blower claims of alleged financial fraud by the promoters at the Nifty constituent. The whistle-blower, whom ET Prime identified as a board member, had alleged that UPL entered into rent deals with a shell company owned by its employees and paid crores of rupees as rent for properties owned by them.

The stock, which opened at Rs 479.90, hit a low of Rs 416 before closing 11 per cent lower at Rs 438.45. It was the biggest loser among the Nifty members, and was also the most active stock on the NSE.

However, UPL management clarified that there were no related party transactions, as alleged. “UPL believes that there is a sustained campaign to malign the image of the company 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 said in an exchange filing.


It also said that an identical whistle-blower complaint was received by the audit committee on June 2, 2017. The committee investigated the charges and all the contents of the complaint were fully disclosed, it stated.

An email query sent to the company did not elicit any response till the time of going to press.

UPL is not new to controversies. Sandra Shroff, vice chairman of the agrochemicals company, had resigned from the board just before the annual general meeting on August 31 as proxy advisory firms recommended that institutional investors should vote against her reappointment as non-executive director, citing the excessive remuneration paid to her through subsidiaries or group companies.

The Mumbai-based firm paid more than Rs 100 crore as remuneration to three non-executive directors — Sandra Shroff, Jai Shroff and Vikram Shroff — in FY20 through its subsidiaries to allegedly bypass the disclosure norms and approval requirements, the Stakeholders Empowerment Services (SES) said.