UPL denies whistleblower allegations of siphoning off money
After the agrochemical company UPL Ltd‘s stocks fell by as low as 14% on Thursday post ET Prime published a report wherein a whistleblower alleged that the company’s promoters siphoned off money, the company has issued a clarification.
In a filing the company said, “UPL Limited is issuing this statement in response to the malicious news report titled ‘Eight shell firms, a Pali Hill house on rent: whistleblower claims UPL promoters siphoned off money’ that appeared in ET Prime on December 10, 2020.”
The company 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 added the following clarifications:
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UPL denies 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;
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An identical whistle blower complaint was received by the audit committee of UPL 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 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;
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It appears that the same whistle blower, motivated by malafide intentions, has approached the media raising the same issue again;
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UPL confirms 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
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UPL confirms that there is no new complaint against UPL.
At around 3.19pm, UPL was trading at Rs437.40 per piece down by Rs11.21% or Rs55.20 from its previous closing on the NSE. The allegations have dragged the company down to the top losers basket on the benchmarks.
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