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Shares of rice exporter KRBL Ltd. fell as much as 12% on Monday, September 15, after Anil Kumar Chaudhary, an independent director on the company's board, resigned citing corporate governance issues. This is the biggest single-day drop that the stock has seen in over three years.
In his letter addressed to the board, Chaudhary said that the present dynamics of the board are inconsistent with the principals of effective governance and independent oversight being key to safeguarding stakeholder interests.
Some of the issues cited by Chaudhary in his letter include:
"In such an operating environment where dissent is suppressed or sidelined, remaining on the Board would compromise both my professional ethics and obligations as defined under Indian corporate governance codes," Chaudhary further wrote in his letter, adding that based on these circumstances, he is unable to contribute meaningfully to the board's functioning in a manner envisaged under the regulatory framework for Independent Directors.
KRBL had informed of Chaudhary's exit last week, on September 9, but the details of the letter written by him were only shared with the exchanges on Sunday.
Shares of KRBL are down 10% on Monday to ₹401.35. The stock has declined 7% in the last one month, but has been an outperformer this year, with gains of over 45%.
In his letter addressed to the board, Chaudhary said that the present dynamics of the board are inconsistent with the principals of effective governance and independent oversight being key to safeguarding stakeholder interests.
Some of the issues cited by Chaudhary in his letter include:
- Inconsistencies in the recording of Minutes of the board and committee meetings
- Instances of information being withheld, impacting informed decision-making
- Unjust write-off of certain export receivables without adequate deliberation
- Concerns regarding the use of CSR funds
- Arbitrary distribution of Variable Pay and Annual Increments to persons holding office or place of profit
- Significant changes to the Object Clause undertaken without comprehensive discussion
- Undue interference by the invitees in the proceedings of the board and committee meetings
"In such an operating environment where dissent is suppressed or sidelined, remaining on the Board would compromise both my professional ethics and obligations as defined under Indian corporate governance codes," Chaudhary further wrote in his letter, adding that based on these circumstances, he is unable to contribute meaningfully to the board's functioning in a manner envisaged under the regulatory framework for Independent Directors.
KRBL had informed of Chaudhary's exit last week, on September 9, but the details of the letter written by him were only shared with the exchanges on Sunday.
Shares of KRBL are down 10% on Monday to ₹401.35. The stock has declined 7% in the last one month, but has been an outperformer this year, with gains of over 45%.
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