UPL Shares Tumble After KPMG Resigns As Auditor To Subsidiary
UPL had asked KPMG for its resignation in their effort to reorganise the audit process.
Shares of UPL Ltd. posted the worst intraday fall in five months after KPMG Mauritius resigned as auditor to its subsidiary UPL Corp.
“In order to reorganise the audit process to improve productivity, at the request of the company, KPMG Mauritius has resigned as statutory auditors of UPL Corp., Mauritius,” the agrochemical maker told the bourses.
KPMG was the auditor for UPL Corp. in FY20 after Crowe ATA's six-year term expired.
M/s. BSR & Co. LLP will continue to carry out the audit of group consolidated financials of UPL Ltd., India, which includes UPL Corp., Mauritius and its subsidiaries, it said. M/s. BSR & Co. LLP is a sub-licensee of KPMG in India.
KPMG Mauritius’ resignation is effective Oct. 8. “There are no circumstances connected with our resignation which we consider should be brought to the notice of the members,” the firm said in its resignation letter, attached with the filing.
BSR & Co. LLP, chartered accountants, were appointed as statutory auditors of UPL Ltd. in the annual general meeting held on July 8, 2017 for a period of five years to audit its standalone and consolidated financial statements, the filing said.
“Auditor resignation due to its inadequate team for conducting global audit, nothing worrisome. Audit responsibility of leading subsidiary just getting shifted from local Mauritius KPMG team to global,” Brokerage firm Phillip Capital said.
According to Gurmeet Chadha, chief executive officer and co-founder of Complete Circle Consultants Pvt, while UPL has clarified that BSR & Co will continue to remain statutory auditors, the market still seems to be concerned. It's better to wait out for more details rather than react basis just the official statements, Chadha said.
Shares of UPL Ltd. plunged 9.5%—the worst intraday fall since May 2020—compared a 0.4% gain in the Nifty 50 Index.
