KRBL Limited , a prominent rice exporter, recently held an investor conference call to address concerns raised following the resignation of Independent Director Anil Kumar Chaudhary. The company's management provided clarifications on several issues, including board processes, a significant export receivables write-off, and Corporate Social Responsibility (CSR) fund utilization.

Director Resignation and Governance Review

Anil Kumar Chaudhary, who joined the board in August 2024, stepped down on September 8, 2025, citing concerns about board processes in his resignation letter. In response, KRBL's management stated that while Chaudhary's observations focused on board processes, no financial or legal compliance gaps were highlighted.

To address these concerns, the company has taken proactive steps:

• The board approved the appointment of an independent third-party firm to conduct a thorough review within 30 days.
• Separate meetings of Independent Directors and the Board were convened to discuss the observations.
• Mr. Dogra, an existing Independent Director, has joined the Audit Committee.

Anil Kumar Mittal, Chairman and Managing Director of KRBL, emphasized that the company has the support of the other three Independent Directors and plans to replace the resigned director within the statutory three-month timeframe.

Export Receivables Write-off

KRBL disclosed a significant write-off of INR 58.00 crore related to export receivables from a 2023 shipment to an African customer. Key points regarding this transaction include:

• The original contract, executed on February 7, 2023, was for approximately INR 79.00 crore.
• Despite receiving partial payments, including INR 17.00 crore in January 2023 and about INR 6.00 crore in FY 2024-25, a substantial amount remained unpaid.
• The company recorded expected credit loss provisions under Ind AS 109, totaling around INR 18.00 crore in FY24.
• With bank authorization, KRBL wrote off approximately INR 58.00 crore in FY25.

The management assured that this write-off was disclosed in the FY 2024-25 annual report and was presented to the audit committee, board, and statutory auditors.

CSR Fund Utilization

Addressing concerns about Corporate Social Responsibility (CSR) funds, KRBL reported:

• Over the past three years, including the current year to date, the company has spent approximately INR 40.00 crore on CSR activities.
• An unspent balance of INR 37.00 crore exists, including the current year's obligation.
• The company follows due process in CSR spending, with an annual operating plan presented and approved.
• Proper due diligence is undertaken before appointing implementing agencies or initiating projects.

Other Governance Matters

The management also addressed other governance-related issues:

• A proposed change in the object clause of the memorandum of association, related to land monetization and real estate projects, was explained as an enabling resolution to unlock shareholder value.
• The company clarified its process for determining variable pay and annual increments for persons holding office or place of profit, ensuring compliance with shareholder-approved limits.

As KRBL navigates these governance challenges, the company remains committed to transparency and adherence to regulatory standards. The upcoming independent review is expected to provide further clarity on the raised concerns and potentially lead to improvements in corporate governance practices.

KRBL Ltd. , a leading rice producer, has taken swift action to address corporate governance concerns raised by a recently resigned independent director. The company's board has decided to appoint an independent third-party firm to conduct a thorough review of the observations made by Anil Kumar Chaudhary, who stepped down from his position on September 8, citing governance issues and professional ethical dilemmas.

Board's Response to Governance Concerns

In a meeting held on Monday, KRBL's board addressed the concerns raised by Chaudhary and outlined a plan to conduct a comprehensive review within 30 days. The findings of this review will be presented to the respective board committees for further deliberation and action.

Stock Market Reaction

The news of the director's resignation and subsequent governance review has had a significant impact on KRBL's stock performance:

Company's Commitment to Transparency

KRBL has emphasized its commitment to transparency and integrity in its operations. In an official statement to the stock exchanges, the company provided details of the actions being taken:

1. Appointment of an independent reputed third-party firm to review the observations made by the resigned director
2. A deadline of 30 days for the completion of the review
3. Presentation of the review findings to respective board committees
4. Deliberation by board committees on the report and submission of recommendations to the main board

Management's Response

KRBL Chairman and Managing Director Anil Kumar Mittal has dismissed the allegations made by Anil Kumar Chaudhary in his resignation letter as false. The board has approved appointing an external auditor to review six or seven specific allegations made by Chaudhary, with results expected within 30 days.

Delayed Disclosure and Market Impact

KRBL delayed making Chaudhary's resignation letter public due to the surprising language used, taking four to five extra days to respond. This delay, coupled with the governance concerns, led to KRBL shares falling 12% on Monday to ₹400.70. Trading volume surged to 1.1 crore shares, significantly above the 20-day average of 7 lakh shares.

Regulatory Compliance

The company has assured stakeholders that it has systems and processes in place to highlight any financial impacts or non-compliances to the board and respective committees. KRBL has also committed to making full disclosures to the stock exchanges in compliance with applicable laws.

Looking Ahead

As KRBL works to address these governance concerns, investors and market watchers will be keenly awaiting the outcomes of the third-party review and subsequent board actions. The company has promised to keep the stock exchanges informed of any further updates, signaling its intention to maintain open communication with stakeholders during this period of scrutiny.

The swift response by KRBL's board to the governance issues raised demonstrates the company's proactive approach to addressing potential concerns and maintaining investor confidence in its corporate practices.