A team from the crime branch visited Mumbai to question Sameer Hiremath, MD of Hikal Ltd, after he allegedly failed to produce himself before the police even after investigators issued him a notice. A team of cops has stationed themselves in Mumbai after they could not locate Hiremath at his residence.
Source : TOI
This article came in Times of India. Below is the link.
gpcb: Sachin Gidc Gas Leak Case: Ngt Issues Notice To Gpcb | Surat News - Times of India (indiatimes.com)
This issue is getting murky day by day and there is hardly any clarification or response from Company side.
Unable to contemplate impact of this entire episode on the relationship that Hikal has with its existening clients/contracts and also on the contracts which may be in discussion phase.
How much impact this incident can have on buisness of the company and its future growth?
It is needless to say that company needs to learn a very hard lesson from this entire episode and should improve on governance, compliance and regulatory front, starting with the detailed disclosure about this incident to the shareholders.
I agree. I am surprised the Company has not done a press release to clear things. As per TOI the MD is alleged not available for questioning and the least the Company could do is to give clarity. I got in when the Company improved disclosures and am got out today as i don’t know what’s happening.
Yes. Very tricky situation. Means here the point of discussion is - Loss of Human Lives. And it’s kind of grave concern. It’s not like some corporate governance issue or some financial fraud.
Well, picture will become more clear in coming days.Till that time it’s sensible to sit out and see how this unfolds.
I exited my positions last week with around 10% loss.
Regards,
Dr. Vikas
Here is my current thinking based on what we know:
The Good:
1 Business impact in near term is negligible. There could be some loss of future business if prospects or even current customers decide to move away.
2 Majority stake is helped by the Kalyani’s of Bharat Forge, they are a well connected and responsible business family. The board has reputed people, and even some Lawyers, so hopefully they are figuring out the appropriate response.
The Bad:
1 Hikal should have done better due diligence on the vendor selection, but they can not be held directly responsible- the Chemical dumping was by a vendor, and the tragedy was a freak mixing of Acidic waste from another unit and theirs.
2 They will probably be fined for negligence and maybe malpractice, but the fines are unlikely to be very big based on discussions with a few people in the chemical industry.
The Ugly:
1 Management silence is not good, this is similar to the lack of communication by UPL during the auditor change last year.
2 The MD not responding to the inquiries, and now absconding. Accidents and bad behavior happen, but the top management are usually not liable, not sure why he is hiding.
I am invested and watching. No panic selling yet, this approach had helped me during the UPL Auditor change event, and Persistent when ILFS went down (Deposits exposure). Maybe this time it will be different, and a real scandal like Theranos and Bernie Madoff, but I will wait and see.
Thanks for the detailed analysis, Investors/mfs/Fii will stay away from suc counters bcos the sentiments are negative, we dont know how this will play out in court the worst case scenario is govt/court may put a lock on that plant for time being.
why take unnecessary chances!
Still no clarity yet to emerge. As a business it might re-emerge, but as a prudent management of risk one should never forget the two rules of investing.
Disc: tracking closely. No ownerships as of date.
Hello Boarders,
I have an observation.
Exchange notification mentions receipt of notice on 15th February, 2022.
Company’s exchange notification timing is 16th February, 23.32 ie 11.32 PM.
Regards
Shutting down of plant on account of Environmental reason is a big blow for the Company and it may have its cascading effect. The Company has miserably failed on Corporate Governance standard by not giving any update on the Surat matter.
Things will get clear after tomorrows concal.
Disclosure: Exited after the Surat incident
Have got in the battery of best Counsels in Bombay 
ordjud.pdf (97.6 KB)
No coercive action till 22.02.2022.
Now with the stay to closure order, i don’t think business will effect atleast for sometime.
Agreed. It is always best to stay out of bad corporate governance even if the results are good. You never know what and whom to trust.
Any one attended the Earning Conference Call?.Request share the gist.Recording not available so far.
The Bombay High Court has set aside the order directing closure of Plant within 72 hours on the ground that the submissions made by the Company has not been considered by the MPCB in proper prespective. Therefore, it has directed MPCB to once again give a fresh hearing to the company and thereafter decide the matter.
But one thing I found slightly surprising is this finding - *“That the petitioner produced `Fenamidone’ in excess of the quantity permitted by the ‘Consent to Operate’, has been admitted by the petitioner.”
Anyways the matter is still far from over.
200100016592022_2.pdf (104.4 KB)
