informed the exchanges on Monday regarding a change in its credit rating by CARE. The company’s long-term bank facilities were downgraded to CARE BBB (under credit watch with negative implications) from CARE BBB+. Its short-term facilities were revised to CARE A3+ (under credit watch with negative implications) from CARE A2.
“The revision in the ratings assigned to the bank facilities of Vadilal Industries
is on account of recurring delays in publication of its financial results on the Stock Exchange for the quarter and year ended March 31, 2019 & quarter ended June 30, 2019,
Resignation of two independent directors raising concerns over the corporate governance in the company and heightened differences among the promoters of the Vadilal group [comprising of Vadilal Industries and its group company Vadilal Enterprises] which could impact the operational performance and capex plans of the group going forward,” CARE Ratings said in a press release.
The board of directors of the respective companies have initiated an enquiry into the legitimacy of certain payments (already debited to the accounts) amounting to Rs 0.30 crore made by Vadilal Industries and Rs 0.59 crore made by Vadilal Enterprises.
Meanwhile, the promoter directors of their respective board meetings held on August 23, 2019 have voluntarily offered to appoint an independent law firm to conduct detailed inquiry in all the matters as reported in the statutory audit report with an aim of value preservation and enhancement in the interests of stakeholders.
The holding Company is of the opinion that the outcome of findings will not have any material impact on the financial statements of the respective financial years, Vadilal Industries said in note to accounts.
Shares of Vadilal Enterprises were locked in upper circuit for the third straight day, up 5 per cent at Rs 965 on the BSE.