Feuding Vadilal Promoters Withdraw Most Allegations
A year after trading allegations, two promoter-directors of Vadilal Group companies withdrew most allegations each other.
After trading allegations for nearly a year, two promoter-directors of Vadilal Group’s listed companies withdrew all allegations against each other except two.
The allegations pertain to Vadilal Industries Ltd., the maker of namesake ice cream, and its domestic distributor Vadilal Enterprises Ltd. The company didn’t name the promoter-directors involved.
The allegations, according to Aug. 24 filing, included:
- Payments to the vendor without services being received.
- Procurement of equipment at prices higher than comparable low market rates.
- Dissemination of company’s confidential data/information to outsiders.
- Legitimacy of salaries paid to relatives of the promoter directors
- Payments made to certain vendors without appropriate approvals
- Claiming personal expenses as official expenses.
The promoters withdrew the allegations on July 22-23 except for two—one each related to the two companies.
Vadilal Industries
- Allegation: Claiming personal expenses worth Rs 25.33 lakh by a promoter director as official expenses between FY18 and FY19. A consultant and a legal firm are investigating the matter, the filing said.
- Counter-Allegation: Claiming personal travel expenses worth Rs 23 lakh as an official expense between FY15 and FY19.
Vadilal Enterprises
- Allegation: Approval of “inappropriate” payments worth Rs 53.33 lakh from FY14 to FY19 by a promoter director. A legal firm is investigating the matter, the filing said.
- Counter-Allegation: Payments worth Rs 45.9 lakh either “inappropriate” or made by “unauthorised personnel”.
Citing the ongoing investigations and a case of oppression and mismanagement against the company and promoters pending in the National Company Law Tribunal, Deloitte Haskins & Sells LLP, auditor to both the listed companies, refused to give any opinion on the company’s financial statement.
The company, in its exchange filing, said the promoter directors voluntarily offered to appoint an independent law firm to conduct a detailed inquiry citing the “disclaimer of opinion” by the auditor.
- Vadilal Industries’ consolidated revenue rose 13.4 percent over a year earlier in the quarter ended June to Rs 260.93 crore. Profit rose 16.5 percent to Rs 37.68 crore.
- Vadilal Enterprises’ revenue rose 14.7 percent to Rs 259.74 crore. Profit more than doubled to Rs 11.18 crore in June quarter.
Independent Directors Resign
The auditor, in its report, said resignation letter of independent directors of both the companies raised concern about the promoter dispute and the hostile environment in board and committee meetings. The auditor also highlighted that the independent directors had concerns on the terms and conditions of sale transactions between Vadilal Industries and Vadilal Enterprises—which are related parties.
The company, in its filing, said the resigning directors had approved the contract between related parties and that the company sought an opinion of a retired Supreme Court judge who found that it was as per the applicable law.