India Gate Basmati independent director quits, flags governance issues

In the latest article on Mint, our Founder and MD, Mr. Shriram Subramanian, explains how the resignation of Anil Chaudhary, former SAIL chairman, from the board of KRBL Ltd., the owner of the India Gate Basmati brand, brings corporate governance concerns to the forefront.

Chaudhary, who stepped down after nearly a year as an independent director, cited inconsistencies in board minutes, suppression of dissent, interference by non-board invitees, questionable CSR fund usage, and arbitrary financial decisions. His detailed resignation letter underlined that continuing in such an environment would compromise both his professional ethics and the obligations laid down under India’s corporate governance framework. The immediate fallout was a sharp 10% fall in KRBL’s stock, highlighting the market’s sensitivity to governance risks.

Mr. Shriram Subramanian highlighted, “It is rare to see such a detailed letter, but such incidents throw the spotlight on blatant corporate governance lapses at companies and why the promoter and management need to take these issues seriously. Immediate impact is loss of reputation for the company as evidenced by the large dip in stock price. If the regulators find merit in the resignation letter, they may issue a show-cause notice to the company and ask for further information. They could even order a forensic audit as some of the allegations border on fraud.”

Read the full article: https://www.livemint.com/companies/krbl-governance-issues-india-gate-basmati-director-resigns-former-sail-chairman-11757936195253.html