Shareholders sue Bhansali Engg for mismanagement, move CLB

Resin manufacturing major, Bhansali Engineering Polymers has been dragged to the company law board (CLB) by its minority shareholders for alleged financial irregularities and mismanagement of funds. Ashwin Mohan of CNBC-TV18 reports that the plea was filed last week with minority shareholders led by MKG Enterprises and associate companies. They together hold a 14.89 % stake in Bhansali Engineering Polymers.

The principle allegation in the case is that of alleged diversion of at least Rs 330 crore by the management to entities under their control, using a promoter group associate company called Jagruti Resins Private Limited. The plea also indicates over-invoicing of raw materials and under-invoicing of sales that benefit the management.
As a result of these alleged actions by the company and the management, there has been depreciation in shareholding value, they say. There have been low or nil dividend payments, and also, their proprietary rights as shareholders have been adversely affected.
As an interim relief, the minority stakeholders have moved the CLB seeking removal of the promoters from the directorship of the company. They have also sought a directive from CLB to appoint an independent officer or an administrator to control the company