Corporate governance is a wide term which cannot be just placed out in 2-3 pages
But looking towards past few events of this company and calling of its promoters, something wrong might be going on in the company.
- BLOCK, BLOCK DEAL
As on 12 feb 2018 one of the top value investors in the world and writer of mosaic theory & the dhandho investor Mr mohnish pabrai.
Had a deal to buy 2.7% stake of Krbl from an existing investor Omar ali balsharaf.
But their deal was blocked by Enforcement directorate with a case against Ail that he had a role to play in VVIP CHOPPER SCAM and was accused that he bought shares of company from those illegal money.
But as Ail fought back his case was settled and came up with conclusion that ED officer who issued a letter to BSE blocking the deal was simply lying.
As Ail hold shares of company since 2003 long before the scam.
- ARREST AND REMOVAL OF INDEPENDENT DIRECTOR.
Another crazy news related to company came around that, one of its independent director MR. Gautam khaitan was accused to be a part of VVIP CHOPPER SCAM and was later on arrested for that.
He was accused that he played a role regarding transfer of funds through illegal route through Dubai subsidiary.
But strange part is that none of the management individuals knew about this.
And when company was targeted regarding the use of its subsidiary, the management stated that they don’t have ownership there as the ownership has been transferred to Anurag Potdar who is the nephew of the promoters of Krbl.
Not just that they were also accused regarding Embraer defence scam of 2008
- HUGE REDUCTION IN TAX.
In a business tax is one this that everyone has to pay. Between the IT department and company, the TAX differences come in a very minor way. But it wasn’t for KRBL
They were demanded 1270 cr of tax as per the article on 8 feb 2019. In which the government didn’t considered paddy purchase expense which was one of the major portions of the disallowed expense.
Total disallowed 2221 cr
Paddy expense from farmers 1996 cr.
As they fought related to this, they stated that different states have different ways of allowing expense.
Like for Punjab if someone wants to buy something, they need to go to mandi broker and not directly to the farmer
But for places like utter Pradesh there is no need of any intermediary.
So as the case went on with the statement that, they had a direct deal with farmers and in cash.
Which was accepted by court and their tax was reduced back to 101 cr from 1270 cr.
These few examples might be unique scenarios that had nothing to do with the business but I don’t have a feeling that something is good about the company.
by Gurjyot singh narang