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UPL plunges over 7% after statutory auditors resign from Mauritian arm

In a submitting to the exchanges, UPL Corporation shared the letters that its auditors had written.

By Urvashi Valecha

Shares of UPL fell 7.6% on Friday, after KPMG Mauritius resigned as statutory auditors for UPL’s Mauritius arm UPL Corporation.

In a submitting to the exchanges, UPL Corporation shared the letters that its auditors had written. In the notification, the corporate clarified that with a view to reorganise the audit course of and to enhance the productiveness, the corporate had requested KPMG Mauritius to resign as statutory auditors of UPL Corporation.

In its letter to UPL Corporation, KPMG Mauritius, mentioned, “We hereby submit our resignation as auditors of UPL Corporation with immediate effect. There are no circumstances connected with our resignation which we consider should be brought to the notice of the members.”

Despite this, shares of UPL tanked to shut at Rs 467.75 apiece.

However, BSR & Co, who have been appointed as statutory auditors in 2017 for a 5 yr interval will proceed to stay because the statutory auditors for the corporate, together with for the consolidated monetary statements of UPL India, mentioned the corporate in its trade submitting.

Deepak Jasani, head — retail analysis, HDFC Securities, mentioned, “The investors and analysts have concerns on why the auditors of Mauritius subsidiary resigned abruptly. The Mauritius arm of UPL happens to be their global investment holding company, it is responsible for the acquisitions that the company makes abroad and to raise debt funding for the same. Investors and analysts have raised concerns in the past about the high debt ratios at the group level and the slow speed at which it is falling.

“Management’s commentary on the resignation of the auditors and the way they are planning to deal with high debt, in the forthcoming September results concall, may assuage some concerns of the investors and analysts.”

The stock of UPL has risen by 83.37% since its March 23 lows whereas, the Nifty has risen by 54% throughout the identical interval. Conversely, the stock of UPL is down by 20.5% because the begin of the yr however the Nifty is just down by 3.4% for a similar interval.

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