In what can only be described as the theatre of the absurd colliding with the world of surreal, developments at the embattled ManPasand Beverages over the last few days have left shareholders and people at large gaping. One needs to hear more from the regulators though! The level of jogger pokery at a new level.
Curiously on September 9, Batliboi and Purohit recently appointed statutory auditors of the company wrote to the Audit Committee and Board of Directors of ManPasand informing them that their audit team was not allowed to enter the Vadodara factory for conducting the statutory audit.
Security informed the audit team that they had no permission to enter the factory premises. This comes against the backdrop of Batliboi and Purohit being appointed as the auditor by ManPasand replacing Mehra Goel & Co who resigned.
Prior to this in May, 2018 Deloitte Haskins and Sells had also resigned on the eve of the comany's earnings report day. The company has been going through a cycle of pain with the MD and CFO being arrested in the past for GST violations and evasion.
The Vadodara incident comes immediately after another fiasco. On September 6, Independent Director Bipin Rathod intimated the two exchanges that a board meeting had been scheduled in Mumbai at 1.30 p.m., which at the request of an independent director was rescheduled for 2.15 p.m.
The meeting convened at 2.13 p.m., and was attended by all board members barring Abhishek Singh, a whole time director.
The board was informed by the newly appointed statutory auditor Batliboi & Purohit that they have discovered innumerable discrepancies in the books of account in the main under sales and purchase, GST returns, subsequent reversal of sales by the suppliers, capital advances, sundry debtors and sundry creditors, operating expenses and non availability of bank statements and other relevant documents and data for conducting the statutory audit.
The auditors have expressed their suspicion on the said transactions to be fraudulent in nature, accordingly to ascertain the true and fair statement of the affairs of the company, the board has decided to appoint an independent forensic auditor for carrying out the same over the last three financial years.
Financial Solutions who had sanctioned loan of Rs 100 crore to the company has also informed the board that an independent study conducted by them has reiterated the above findings.
At this juncture, CMD Dhirendra Singh refused to continue as part of the proceedings further. This is when the rest of the board decided to take a break to reconvene at 5.30 p.m.
The new meeting continued to see Dhirendra Singh missing; Abhishek Singh Bharati Naik, Shailika Soni newly appointed Company Secretary also refused to be part of the meeting.
All this now openly contravening Companies Act and Sebi regulations.
Meeting concluded at 6.02 p.m. after the board was informed that a lender Finquest Financial Solutions had entered into a call option agreement dated 19.7.2019 with promoter Dhirendra Singh and ManPasand.
Dhirendra Singh had agreed in the agreement to irrevocably grant a call option on the call option shares 2,53,65,000 shares equivalent to 22.16 per cent of the paid up capital to sell the same in favour of Finquest Financial Solutions.
Complicating the issue and clearly showing that the board is a house divided with heated arguments taking place, Dhirendra Singh on September 12, intimated the exchanges that -- we wish to clarify and affirm that the promoter does not have any intention to sell the stake held by them.
At the time of writing, the share price was at Rs 12.15.
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