Vadilal Industries has disclosed additional details regarding the resignation of Mr. Shivakumar Dega from his position as Independent Director and Chairman, revealing serious governance concerns that prompted his departure. The resignation, effective February 17, 2026, was driven by the company's failure to pay minimum wages to factory workers, which Dega characterized as a statutory violation with significant legal and reputational implications.

Resignation Background and Timeline

Mr. Dega served on the board for ten months after joining in May 2025, attending all 10 board meetings during his tenure. His resignation letter, dated February 17, 2026, detailed his concerns about the company's non-compliance with minimum wage requirements under the Minimum Wages Act 1948 and Code of Wages 2019.

Minimum Wage Violation Concerns

In his resignation letter, Dega highlighted that the company had paid factory workers less than the minimum wage, describing this as a "serious offence" that could lead to legal action for forced labour under Article 23 of the Indian Constitution. He expressed concern that the company's results and share price were "inflated to the extent of this amount of underpayment."

Dega had consistently opposed this practice, formally documenting his objections in writing to the board in January 2026 and raising the issue at the February Audit Committee meeting. He also warned the CEO about these concerns in phone calls during October 2025 and January 2026.

Company Response and Remedial Actions

Vadilal Industries acknowledged that it had initiated an assessment of compliance with relevant statutory provisions prior to receiving the resignation letter. The board has committed to expediting this assessment and has taken the following steps:

Additional Directorship Details

As part of the regulatory disclosure, the company revealed that Mr. Dega holds directorships in other listed entities, including Yes Bank Limited and Intellect Design Arena Ltd. He also serves on multiple board committees at Yes Bank Limited, including the Nomination and Remuneration Committee and Corporate Social Responsibility Committee.

Regulatory Compliance and Future Steps

The company has fulfilled its disclosure obligations under SEBI (LODR) Regulations, 2015, by notifying both the National Stock Exchange and BSE Limited. Company Secretary Rashmi Bhatt signed the regulatory filings, confirming adherence to corporate governance procedures. The board has expressed its commitment to maintaining the highest standards of governance and compliance while addressing the concerns raised by the departing chairman.

Vadilal Industries Limited , a prominent player in the Indian ice cream and frozen food industry, has announced a significant change in its leadership structure. The company's board has approved the re-designation of three key promoter directors from executive to non-executive positions, marking a shift in the company's governance approach.

Leadership Transition

The board's decision affects three prominent figures within the company:

1. Mr. Rajesh R. Gandhi
2. Mr. Devanshu L. Gandhi
3. Mr. Janmajay V. Gandhi

These directors will transition from their current roles as Executive Directors to become Non-Executive Non-Independent Directors. This change is set to take effect from September 29, 2025, or upon the appointment of a Chief Executive Officer (CEO), whichever occurs earlier.

Timing and Terms

The re-designation is aligned with the company's articles of association, which mandate this transition. Despite the change in their roles, all three directors will continue to serve on the board until May 13, 2030, completing their remaining appointment terms.

Decision-Making Process

The decision for this leadership restructuring was not taken lightly. It came as a result of a recommendation from the Nomination and Remuneration Committee, which was subsequently approved during a board meeting held on September 13, 2025.

Implications for Vadilal Industries

This move represents a significant shift in Vadilal Industries' corporate governance structure. By transitioning these promoter directors to non-executive roles, the company is potentially paving the way for professional management to take a more active role in day-to-day operations.

The change could also signal Vadilal's commitment to aligning with best practices in corporate governance, potentially enhancing its appeal to institutional investors who often look favorably upon companies with a clear separation between ownership and management.

As Vadilal Industries prepares for this transition, stakeholders will be keenly watching how this change impacts the company's strategic direction and operational efficiency in the competitive ice cream and frozen food market.