Some risks which continue here:- (FY21)
On account of various disputes between two brothers of the promoter group who were also on the Board of VIL and VEL, auditor had issued disclaimer of opinion on the accounts for FY19. However post that, the promoter directors have withdrawn their major counter claims against each other and the quarterly results of the company are also getting published within timelines. Further, both promoter brothers are re-appointed as Managing Directors of VIL. Also, an external law firm & CA firm were appointed by independent board members to verify the left out claims of the promoters. During FY21, the company had already received interim audit report on certain matters which exhibited no adverse observations or findings regarding the allegations related to operational and management matters. However, the auditor have maintained a qualified opinion due to pending receipt of the report over other allegations levelled by the promoter directors on each other over potential personal expenses that were claimed as business expenses. Further, a new allegation raised by a promoter director in FY21, in VEL, relating to matter involving operations and management issue wherein marketing expenses of advertisement amounting to Rs.38 crore paid by the company during the period FY16 to FY19 alleged to be done without following the due process of the company and which were also handed over to same independent CA firm and law firm to investigate, the report of the same is still pending.
Moreover, one of the promoter group (Virendra Gandhi and family) had filed a petition in FY18 against the Vadilal group in National Company Law Tribunal (NCLT, Ahmedabad Bench) for alleged oppression and mismanagement. The said matter is under preview of NCLT and no decision has been arrived yet. Resolution of the said allegation as well as NCLT matter will remain key rating monitorable.
Another dispute exists in Vadilal chemicals between the three brothers. Been going on since 2015. Case is in NCLT.
From the credit rating
Story looks interesting, but risks exist due to fighting between the promoters.
Disc: no ownership. Tracking.
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