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Why, along with OpenAg, UPL needs OpenAc

The agrochemical giant’s operating catchphrase is OpenAg - open agriculture network. What it needs right now is OpenAc - open accounting  

December 10, 2020 must be a day hard to forget for promoter Jaidev Shroff as well as the investors of UPL. That day, a media report citing a whistleblower complaint about the promoters knocked off 12% of the company’s market cap. On Twitter, #UPL was getting a lot of hits and Shroff would have wished that they carried updates from Uganda Premier League than that of his own company. The stock saw trading volume of 91.5 million shares of which 16.9 million were marked for delivery. Effectively, 12% of the equity was traded and 2.2% of the company changed hands at an average traded price of Rs.432. That price now effectively is a marker for existing investors in terms of whether the worst is behind for UPL.

This was the second governance issue that had cropped up in just over a month. In October, the company had informed the exchange about the abrupt resignation of KPMG Mauritius as UPL Corp’s auditor. That, too, had knocked off 10% of market cap. Earlier still, in August, just before the annual meeting, vice chairman Sandra Shroff resigned from the board as there was a hue and cry raised by governance advisory firm SES over excess remuneration paid to non-executive directors via subsidiaries. In contrast, prominent investor Vinod Sethi ceasing to be an independent director from September 2019, after being 13 years on the board, did not get talked about as much.

The excess remuneration issue died a natural death but the sudden resignation of the auditor at UPL Corp set tongues wagging. For one, UPL Corp has been the primary acquisition vehicle for the UPL promoters and hence an important subsidiary. Second, because KPMG replaced the existing auditor Crowe ATA less than a year ago and the talk then was about appointing a global firm, bringing in transparency, etc.

Even as the company in its last concall maintained that they fired the auditor because they were not finishing the work on time, Nitin Mangal, an independent research an


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