UPL shares nosedive after whistleblower claims promoters siphoned off money

Agrochemicals firm UPL Ltd share price plunged nearly 11 per cent today, after a whistleblower claimed that the company promoters were siphoning off money. UPL shares opened at Rs 479, which was Rs 13.3, or 2.5% lower than the previous day’s closing price. Further, through the day, the shares fell to the low of Rs 416.05, before closing at Rs 438.45 at Bombay Stock Exchange (BSE). The whistleblower, who is a board member of the listed agrochemical company, alleged that UPL entered into rent deals with a shell company owned by its employees, and paid crores of rupees in rent for the properties held by the latter, said a news report in the Economic Times.

However, denying the claim, UPL CEO Jaidev Shroff said that the whistleblower’s complaint was put to rest in 2017 only. Further, Shroff said that the matter was fully disclosed, while the audit committee at that time had given a clean chit to the company. While speaking at an interview with ET Now, Shroff added that the audit committee reviewed the complaint and concluded that everything was fine.

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In a separate interview to CNBC-TV18, Jaidev Shroff said that the complaint was made by his estranged wife, about the house that he lives in. He underlined that the rental agreement is cancelled and the house is no longer rented to UPL.

Meanwhile, UPL reported a turnover of Rs 3,162 crore and a net profit of Rs 104 crore in the second quarter of the current financial year. However, its operating margin fell from 18.9 per cent in Q1 to 13.06 per cent in Q2. The market capitalisation of the company stands at Rs 33,517 crore, as on today. After the acquisition of  Arysta LifeScience, UPL has reportedly become the fifth largest agrochemical company in the world.