Governance concerns rattled KRBL investors.Retail sentiment on Stocktwits, however, stayed neutral despite the heavy sell-off.
Shares of the world’s largest producer and miller of basmati rice, KRBL fell over 10% on Monday after independent director, Anil Kumar Chaudhary, resigned on Sunday, citing significant corporate governance concerns in his letter.
Investors tread with caution as KRBL saw its biggest single day fall in three years on back of this news. It was also trending among the ‘most active’ list on Stocktwits at the time of writing.
Red Flag On Governance Sparks Sell-off
In a letter to the board, Chaudhary stated that the current board dynamics are not aligned with the principles of effective governance and independent oversight, which are crucial for protecting stakeholder interests.
Among key concerns, he flagged:
• Records not kept properly: Inconsistencies in the recording of Minutes of the Board and Committee Meetings
• Information under wraps: Instances of information being withheld, impacting informed decision-making
• Concerns on write offs and CSR funds usage: Unjust write-off of certain export receivables without adequate deliberation as well as concerns regarding the use of CSR funds
• Payout warning: 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
Chaudhary added that these issues have persisted despite his attempts to resolve them. “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,” he said.
What Is The Retail Mood?
Data on Stocktwits, however, shows that retail sentiment remained ‘neutral’ as of 11 am. It was ‘bearish’ last month.
KRBL shares have risen over 30% so far this year.
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