Shares of KRBL, one of India’s leading basmati rice producers, fell sharply by over 9% on September 15, 2025, after the company disclosed that an independent director resigned citing serious governance issues. The sharp decline reflects growing investor unease over the board’s functioning and transparency.
Anil Kumar Chaudhary resigned from KRBL’s board with immediate effect on September 8, 2025. The company informed stock exchanges the next day, but it was only on September 14 that the resignation letter was shared in full. In the letter, Chaudhary expressed concern that “certain issues” had persisted despite efforts to resolve them, posing “professional and ethical dilemmas” and making it difficult for him to contribute meaningfully to the board’s governance as expected of an independent director.
Chaudhary pointed to several specific governance lapses, including “inconsistencies” in recording board and committee meeting minutes and instances where information was withheld, affecting informed decision-making. He also raised red flags about financial irregularities, such as “unjust write-offs” of export receivables without proper deliberation and questionable use of CSR funds. Furthermore, he noted “arbitrary distribution” of variable pay and increments, significant changes to the company’s object clause without comprehensive discussion, and undue interference by invitees during meetings.
One of the most serious concerns raised was that dissent on the board was “suppressed or sidelined,” which, according to Chaudhary, compromises both professional ethics and obligations under Indian corporate governance standards. He added, “Effective governance and truly independent oversight are essential ingredients for safeguarding stakeholder interests, and I find the prevailing dynamics of the Board to be inconsistent with these principles.”
The resignation and the issues highlighted have unsettled investors, contributing to the steep selloff in KRBL’s stock. Despite this setback, the company’s shares have gained more than 32% so far this year, buoyed by strong performance metrics. In the June quarter, KRBL’s export revenue surged 98% year-on-year to ₹489 crore, while total revenue rose to ₹1,584 crore. The company reported an EBITDA of ₹225 crore and a net profit of ₹151 crore, reflecting robust growth driven by export demand.
As of now, KRBL has not responded to the allegations made by the outgoing director. With governance concerns now in focus, investor confidence in the stock is likely to remain fragile until further clarity emerges.
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