Shares of PVR INOX crashed as much as 8 percent on Monday after reports suggested the cinema exhibition company asked a senior executive to leave in April following an internal investigation into alleged kickbacks worth up to Rs 200 crore from developers involved in building cinema properties. As per reports the Chief Executive Officer for Growth and Investment at the company, along with a few others, was asked to leave with immediate effect in April after the alleged probe found irregularities.
Responding to Times Now Digital’s query on the matter, PVR INOX’s Spokesperson stated, “PVR INOX has and continues to place the highest importance and follows the highest corporate governance standards, ethical business practices and accountability across the organisation. The Company has established policies, processes and internal controls to guide its operations and stakeholder relationships. PVR INOX has appropriate governance mechanisms to review and address matters that may warrant internal consideration. Any insinuation in the media report against its current stakeholders is baseless. PVR INOX remains committed to conducting its business responsibly, in accordance with applicable laws and its established governance standards, while upholding the principles of integrity, transparency ,
Analysts are likely to focus on the potential impact of the allegations on PVR INOX’s corporate governance, investor confidence and valuation, even as the company has strongly rejected the media report as baseless. The sharp fall in the stock reflects investor concern and uncertainty regarding the reported internal investigation and the exit of a senior executive. The company’s reaffirmation of its governance framework, internal controls and practices could help limit concerns if no further adverse developments emerge. Investors are likely to closely monitor any additional clarification from PVR INOX, developments relating to the internal investigation and potential disclosures that could establish the governance impact of the matter.