LAST UPDATED: Dec. 11, 2020, 11:46 a.m.
New Delhi (Anish Yande): UPL shares recovered quickly after the company released a statement clarifying its position on recent allegations made by a whistleblower. The whistleblower had earlier alleged that UPL was directing company funds into a shell company. The company shares were down at Rs Rs 438.45 on the previous day’s close, down by 10.94 percent.
The whistleblower issued allegations that UPL had commenced several rent deals with a shell company, which was owned by UPL employees. The company paid rent estimating to several crores to this shell company. The whistleblower had claimed that UPL had siphoned their company funds to these shell companies.
Several reports suggested that the whistleblower was a member of the UPL board.
United Phosphorus Ltd Clarifies its position on the Allegations:
CEO of UPL, Jai Shroff, dismissed the allegations by the whistleblower. Shroff said that the complaint was regarding an identical complaint received on June 2, 2017. The audit committee of UPL had reviewed the complaint.
Shroff said, ‘The auditors reviewed it and was put to rest in 2017.’ He said that the rental deal was an ‘arm’s length transaction’. Jai Shroff said that J.Sagar and Associates had reviewed the rental deal.
UPL released a statement in which it denied the allegations that the whistleblower was a member of the UPL board. The statement reiterated Shroff’s statement saying that an audit committee had reviewed the complaint from 2017 to 2018.
UPL Whistleblower Committee Investigates:
The audit committee issued the formation of a whistleblower committee, which consisted of only independent directors. The entire complaint with all its content was fully disclosed. The complaint was reviewed in detail by the committee with the assistance of an independent law firm.
The committee deemed that the transactions were compliant with all laws.
UPL stated that the deals were conducted on an arms-length basis. The company denied allegations of siphoning off funds stating that they abided by all governance laws. The company said, ‘UPL believes that there is a sustained campaign to malign the image of the company and the group.’
After the company’s clarification, the shares rose by 4% to climb up to Rs 456.80, at the opening bell on Friday.
Image Credit: Google