Rice exporter KRBL, best-known for its India Gate basmati brand, on Monday said it would appoint an independent third-party firm to examine allegations of corporate governance lapses raised by independent director Anil Kumar Chaudhary, who resigned last week.
The company had disclosed Chaudhary’s resignation letter in a stock exchange filing on Sunday, triggering a sharp reaction in the market. The stock slumped over 10% intraday on the BSE on Monday before closing 9.59% lower at Rs 401.50 apiece.
Allegations of irregularities
In his resignation letter, Chaudhary flagged inconsistencies in the recording of board and committee minutes, withholding of information, concerns over the use of CSR funds, and unjust write-off of certain export receivables. “I have raised these matters whenever appropriate, hoping for resolution in the interest of the company and its stakeholders. In 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 wrote.
This marks the second exit of an independent director in two years at KRBL. In 2023, Ashwani Dua stepped down citing personal reasons and other commitments.
Company response and financial backdrop
Following a board meeting on Monday, the company said it would complete a review of Chaudhary’s observations within 30 days and present the report to the relevant committees. “We continue to conduct the business with utmost transparency and integrity and would keep the stock exchanges informed about any further updates,” KRBL said.
The board noted that KRBL already has systems and processes in place “commensurate with the size of the firm’s operations” to ensure that any financial impact or non-compliances are flagged. It added that disclosures would continue to be made to stock exchanges in line with applicable laws.
The governance concerns come against a mixed financial backdrop. KRBL closed FY25 with revenue of Rs 5,594 crore, up 3.88% year-on-year, but net profit slipped 20.16% to Rs 475.80 crore. In the June quarter of FY26, revenue rose 32% year-on-year to Rs 1,584.35 crore, while profit jumped 74% to Rs 150.50 crore. Sequentially, however, net profit was down 2.46% even as revenue grew 9.85%.