UPL Limited : Company with Continuous Corporate Governance Issues

 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.

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
Beat The Street

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Note : No content of this blog should be construed to be investment advice. You should consult a qualified financial advisor prior to making any actual investment or trading decisions. All information is for educational and informational use only. The Author accepts no liability for any interpretation of article or comments on this blog being used for actual investment. This is purely an information services, and any trading done on the basis of this information is at your own, sole risk.


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