Company with Continuous Corporate Governance Issues

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 UPL Limited is Agro-Chemical company which comes to under scanner of various stakeholders for alleged corporate governance issues.

Here is analysis of 

1.Whats Happening at UPL ?

2. What Management says ?

3. What Brokerages are saying?

4. What investors should do?

Whistleblower Complain : What’s Happening

An anonymous complain came through ET Prime citing fund siphoning through 8 shell companies which alleged to be owned by employees of UPL. As per complain, UPL entered into lease and rent agreement with these companies to siphon funds of companies.

What Management says ?

CEO Jaidev Shroff refuted the allegations, saying the report is “completely malicious” and the board has not received any whistleblower complaint.

Company in con-call says these transaction pertains to year 2017 when Audit committee reviewed and gave clean chit. 

None of the promoters of those 8 companies are related to UPL.

What Brokerage says ?

Of 35 analyst tracking stock, 32 have BUY rating , 2 have HOLD rating and 1 have SELL rating.

To summarize all brokerages views on current whistleblower complain is that despite good performance at business front such corporate governance issues have negative impact on share price.

Also Read on FinMedium:  Conscious Kitchen Sinking of Numbers? – Just Another Investor

Watch this on YouTube : UPL Whistleblower News by Beat The Street 


What Investors should do?

Investors are advice to avoid bottom fishing in such event, stock already fall 15% due to this event. It seems price will hover around this level untill any positive event/news comes.

PI Industries is another agro chemical which is good buying opportunity.

Interestingly this is not first time , company has faced 3 corporate governance issues in 2020 itself but none of the allegations has proven to be true. But this time SEBI is planning to conduct Forensic Audit and only time will tell who was wrong.

Here is look at timeline of corporate governance issues at UPL :

Blog by Nimish Maheshwari & Sudarshan Bhandari

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Beat The Street

Beat The Street is a Financial and capital market-based blogger & Youtube platform that is managed and owned by Nimish & Sudarshan who have worked for big consultancy firms as research analysts. Both have a deep knowledge of the capital market and economy and having experience of more than 5 years in this field. Their aim is to bring unique and curated analysis to investors and the public so that they can make informed decisions. They share their analysis and opinion via youtube and blog.
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