KRBL Limited (KRBL) Earnings Call Transcript & Summary

Thank you for being with us today on today's call, hosted by the management of KRBL Limited in order to discuss the latest legal developments and the company's response to them. Joining us on the call today are Chairman of KRBL Limited, Mr. Anil Mittal; Joint Managing Director of KRBL Limited, Mr. Anoop Gupta; and Mr. Anirudh Bakhru, Legal Counsel for KRBL Limited. Before we begin, I would like to remind participants that statements made on today's call could be forward-looking in nature, and the company does not undertake to update them publicly. With that, I would like to invite the management to share their views following which, we will take questions and answers. Over to you, Anilji.

Good morning, and thank you for being with us early today in. We have hosted this call to share our perspectives on the ongoing legal pertaining to the ED in view of the latest developments. To give you a context, the Enforcement Directorate yesterday has filed a complaint in an ongoing matter, wherein it has named members of the management. At the outset, we would like to state that the allegations leveled by the Enforcement Directorate are false, frivolous and baseless. KRBL Limited hasn't entered into any sham agreement with any entity. During our last interaction, we had to settle [indiscernible] into [Audio Gap] We continue to legally defend our position and are of the opinion that we have a solid case. In the present business environment, [indiscernible] our strong objections and we keep [Audio Gap] Developments in the future. The company's operations are being conducted smoothly and thus, it has remain unaffected. This will continue to be so. I would like to hand over to Mr. Anoop Gupta, our JMD, for his views on this matter. Over to you, Anoop.

Thank you, Anilji. Good morning, and I welcome all of you to today's early morning discussion. Thank you for joining us. To add further to what our Chairman has shared, we have been cooperating on all -- we have been cooperating on the entire investigation... [Technical Difficulty] What happened?

Yes, sir, we can hear you, please proceed.

To add further to what our Chairman has shared, we have been cooperating on the entire investigation by the Enforcement Directorate for the last 3 years and have supplied all documents asked by the Enforcement Directorate, none of which, in any way, supports the allegations advanced by the Enforcement Directorate. KRBL shall defend against such actions of the Enforcement Directorate as it has done before and will succeed in due course. I will further reiterate again that neither KRBL, nor the management has any involvement in any wrongdoing whatsoever. We would like to reassure stakeholders that it continues to be business as usual, as far as the operations are concerned. With that, we will be happy to address any questions from the participants in the matter. Moderator may kindly commence the questions and answers.

[Operator Instructions] We have a first question from the line of Varun Goenka from Nippon Mutual Fund.

So coming to the event, of course, is beyond our control. It's not that we could do anything. We can't stop anybody else from tweeting or saying anything on social media, but what's in our control is the actions from our side. So are we trying to pass any kind of a buyback or something, if anything unforeseen happens?

Yes. Yes, Varun, we are comfortable as far as cash is concerned. And we are thinking that cash should be given to the investor. And buyback can be one route definitely. It can be one of the routes to give back some cash to the investor. And naturally we will be -- subject to our Board approvals, we will be looking at it. Definitely, we'll be looking at it. And we'll look -- we are very positive on that account.

So Anoopji, the problem has been that, I think we've been speaking for last 18 months, but it always somehow just comes to, we will see. But ultimately, enough corporate action does not happen. Irrespective of the -- I mean -- so if my calculation is not wrong, would you be carrying almost INR 4,000 crores worth of inventory?

Yes. We should carry by 31st March.

Yes, right. So you'll have around INR 4,000 crores of inventory and more than INR 500 crores of cash. And this cash will further increase by March, right, sir, as we liquidate the inventory?

It will be invested in the inventory only, definitely by March, yes, it will be invested in the inventory. No, surplus cash would be there, but it will be invested in the inventory.

Sure. So basically, the problem is India Gate brand and Unity brand has done very well, but the KRBL corporate brand has had a lot of issues. And obviously, the investors -- I mean, this is probably the only consumer company I know which is at these valuations or has such issues. But like I have shared with you earlier, so I think the issues are more related to our PR management or our communication with shareholders or our actions rather than [Technical Difficulty] action or any other legal issues. There are so many other companies which have similar or larger issues aside. So I fail to understand why doesn't the management see value in their own company right now? So either the inventory value is wrong, either the business valuation is wrong, you feel that at INR 6,000 crores market value, KRBL does not deserve this, even it probably deserves even lower? Or where is the disconnect is what I'm failing to understand, sir?

There's nothing wrong, Varunji. As far as valuation is concerned, we are -- if you talk to every banker or you see the bankers who have advanced to basmati rice traders, the valuation of KRBL is the lowest in the industry today as far as stock valuation is concerned. So there is no question of overvaluing the stock, number one. And we are paying tax at the rate of -- we are paying practically INR 200 crores, more than INR 200 crores as income tax every year. So there's no question of overvaluing the stock. Why should I overvalue any stock? And our auditors are now DT, and they are very strict auditors. They are big 4, and they are very, very strict auditors, nothing can go haywire.

No, no, no. I did not mean you are overvaluing the stock. What I'm meaning is…

There's nothing wrong in the business. What I'm trying to say is there's nothing wrong in the business. What you are trying to say when management sees a value in their own company, why don't they buy back? That is your question?

Right. Yes, sir. Yes, sir. Absolutely. It's not just about…

Yes. The question is...

Yes, sir, go ahead.

Question is -- one is the promoter gets the buyback. One is the company should get the buyback. Promoter doesn't have much funds to take buyback. We have already -- you must have seen last year, we have promoters have bought back many shares. We have increased our holdings by practically 1.7% from 58% to 59.7%. But as far as company is concerned, we were always of the opinion that we have to reach a top line of INR 8,000 crore, INR 9,000 crore, and we need funds for the inventory because inventory is the game in our business and hedging is a game in our business. When inventories require too much dependency on bank, it's never good. Today, our borrowing rate is just 400 basis point of Indian rupee. Yesterday, I borrowed at 3.85% per annum. You see, if I liquidate myself too much, then my borrowing rates will go up definitely. There is no doubt about it. And I don't want to be dependent on banks. That was the only issue, nothing else. But your point is quite taken. Now we will immediately have a Board meeting, and we would like to pay some cash to the shareholders, definitely. And the line can be dividends, the line can be buyback, the line can be any other thing. We have to discuss with our consultants, and we'll come out -- come out with something.

Okay. So my point is that you -- first, our borrowing cost is so low, 4%, 5%? That's correct. Secondly, we have investment in a power business, which is low growth and low return on equity versus our consumer business, which is high-growth and 20% ROE plus. If both these factors are right, which you yourself are saying, then how can we not -- and we are talking about maybe a INR 300 crores, INR 500 crore of production, which is barely 6 months of your cash flow, not more. And it's a one-time event. It's not that you have to do it every year. Every year, you have to do probably only worth the dividend. This particular buyback, you see a mere -- only a mere announcement is enough to allay the fears of investors, credit rating agencies, bankers, et cetera. Also, today, if I'm not wrong, INR 4,000 crores of inventory, INR 2,500 crores of maybe land, plant and machinery, so your brand, that itself is worth maybe at least 2x the current market value. So if the management as a business and as an entrepreneur does not see value in that, how can somebody else see?

No, no, we definitely see value in that. We definitely see value [indiscernible].

I think this is...

Sir, I'm sorry to interrupt. Would you like to come back to the question queue. We have next question from the line of V.P. Rajesh from Banyan Capital.

I just wanted some clarification on the case itself that you disclosed to us. So what happens next? Do you guys go for an anticipatory bail? Does that not happen? Or how will the process move forward? Because obviously, it will be a little bit of a distraction for the management?

Let Anirudh answer this.

Right. So see, anticipatory bail will not be required. We'll normally get bail on the base point itself. We've cooperated for the investigation for the last 3 years. So there is sort of no worry there. This is exactly a culmination of what we've been expecting and the matter will carry on the way it's been carrying on. There'll be no distractions to the management to that extent.

Okay. But if they have filed -- see, till now, the case was against the company, not the individual members. And if you can clarify which are the members that have been named in that company or in that...

So as of now, we've not been served with anything. We've not been served with anything yet. And until we are officially served something from the court, we would have no idea. There's no formal summons issued to anybody from KRBL or KRBL for that matter at the moment.

We are reacting only to our 2 competitors, actually.

Okay. And I think I would agree with the previous questioner's comments about buyback. I think that will enhance the confidence. And I mean we have been shareholder for quite some time, and we trust you, but still, I think there's a broader investor base that would feel comfortable if there is a buyback announcement.

Yes.

We have next question from the line of Jaspreet Singh from VA Capital.

Anilji, since the amount of settlement in this thing -- amount of consideration is very small, INR 15 crores compared to your balance sheet size. Is it possible to do some out-of-court settlement?

No, no. Mr. Bakhru?

No. Unfortunately, that is not provided under Indian law. It's not a litigation between 2 private parties where you can -- most litigations with the government, such avenues are not open.

So what is the -- what is the strategy that you would be following? Would you be -- because this can linger on for next 5 years, 10 years, nobody knows about it, right?

Unfortunately, this will linger on. Let us give you an instance. We moved the Appellate Tribunal in 2019. We got a very good order from the Tribunal that protected us. The government for the last year has refused to even file a reply. When government is on the other side, they are very lethargic in how they proceed. That, unfortunately, is out of our hands. So it will be like most litigations in court. It shall take its -- it will take -- it will take some time in court. It's out of our hands.

It can't be expedited?

It is unlikely it's expedited because when it comes to courts, government is like the crippled child. No courts will ask them to expedite it. They go at their own pace.

Okay. And...

Only good thing is that our interest now after the High Court orders stand protected. So even we are not too worried about how long this takes. Whatever protection we wanted to be in course for this entire proceeding is now in place. The High Court has given us a protection. So even we are in no rush. We'll just see how it unfolds. There's no risk.

So are physical hearings taking place? Or is it -- are you doing online hearings only?

So see, they are trying to do physical hearings, like High Court is doing one court -- one judge once a week, but nothing really is happening. Bulk of the hearings are happening from -- through Webex or Zoom and stuff like that, so. And the second thing is once we even get back to physical hearings, there's a pending board of matters that will explode on every forum, which has not -- matters which have not taken place for the past 6 months. They are still on board. They'll also have to be dealt with.

Okay. Okay. Anoopji, assuming this thing lingers on for next 5 years or 7 years, I think as the previous participant suggested, doing a corporate action from the side of management is the only imperative left now. Otherwise, I mean, you are sitting on such a high inventory, your valuations are high. We understand in the last 2 months, the prices of crop, which you have bought already has shot up by almost 30%. And if you are not taking an action right now, there is no question of trust with the management?

Okay. We'll look at it. Definitely, we'll look at it. We'll immediately call a Board meeting and discuss it.

We have next question from the line of Subhankar Ojha from SKS Capital.

Yes. This is Amitabh Sonthalia. Thanks for arranging this call on an urgent basis. It also shows the intent of management to allay investor fears. So there's no doubt about the strength of your business model. There's fantastic growth you've shown in the last few years. The net cash you've generated, you're debt free as on September. So -- and the quality of the promoter, no one doubts that, what you've achieved in the last 5 years, which is fantastic. But these 2 cases which are outstanding, right? One, they all pertain to things from 8, 10 years ago. We understand that. But the average person will always -- the new -- any potential new investor will always say well, there cannot be any smoke without fire. I mean the management has denied everything, has come out mostly clean with all the allegations. But if you can just perhaps put things into perspective, I mean, one, that why -- what is your best guess? Why did KR -- if KRBL is completely clean, and -- then why did our name get dragged into these 2 different cases? I mean, it's not like the randomly people just dragging names without any sort of -- so why do you think -- I mean, there should be some logical reason why KRBL's name has -- one case pertains to Gautam Khaitan, who was an Independent Director who was vindicated. We get that. But in this case, this Embraer case, if you can just kind of share a little more facts with us, that would be helpful. And how this matter can be disposed? Now this particular ED matter is only about INR 15 crores. Is there a possibility that you can settle it with ED and remove the overhang and just pay them under protest until the final outcome is known, something like that? I mean, I obviously don't have any idea about how these cases work. But just some more granular details on what has happened and why would be helpful.

Yes. As far as just 2 cases you are saying, one is of Balsharaf where KRBL has nothing to do.

Hello?

Yes.

Hello?

KRBL has not -- yes. You can hear us now?

Yes, I can hear you. Some disturbance in the line, maybe on my side.

Where it is -- it is -- the one case, which is of AgustaWestland, it belongs to Balsharaf. And fortunately or unfortunately, it's one of our big buyers in Saudi Arabia. So KRBL has nothing to do in it. And number two, as far as Embraer deal is concerned, you are right. Gautam Khaitan was the Independent Director of the company. And he introduced Interdev Aviation to us. But that has nothing to do with Embraer. The point is only with the introduction or something, Gautam Khaitan involvement, they are making me -- they are making me the scapegoat; nothing else. We are not at all involved in the Embraer deal at all. No transaction of Embraer has been routed through KRBL.

Right. No, we completely believe you, sir, that's -- why would a company like yours get into a few thousands of crores of profits and turnover get into INR 10 crores, INR 15 crore deal. But sir, I mean, how does this -- my -- but there's still some confusion that there was some link, which, as you mentioned, maybe it was -- I personally believe the company is clean and absolutely innocent. But the question is that in the past, we all inadvertently make some mistakes, which we're not in sort of -- all of -- something some -- so how does this get resolved is my question? I mean, how does -- how do we -- what is the time frame by which -- I mean, and process by which this can get resolved? Just because the investors, we don't have much knowledge of how these things work. You've been taking the best legal advice on this matter, so.

No, it will take a legal course. Hello?

Yes.

Hello?

Yes, yes, I can hear you, sir.

Mr. Bakhru, would you like to -- Mr. Bakhru, would you like to comment on that?

Yes. Yes. See now what we were originally anticipating something goes to 1.5 years, 2 years. But that is pre-COVID. And that never took into account the lethargy the government has shown in this litigation. This is a litigation where the government has been extremely lethargic. Now we sort of have to go on a very reactive basis in order to react to what the government does as and when. Like, they've now moved the prosecution. We'll react. So whatever is in our hands will be expedited, but given COVID and given the fact that for this one particular case, the ED is going in an extremely lethargic manner, it will take some time.

Is that due to some political vendetta? Is there something that perhaps...

No, it's just that -- see, according to us, it's a very hollow case. So they have sort of tried to drag it on and drag it on because the moment this goes to culmination, I don't think it will survive in any court of law. And that is why 2 courts in this country today have come to our aid and the felt that an interim order needs to be passed. If it was political, then this would have taken a very different turn. But it's not taken the kind of turn you've seen in media and all that. It's not even close to a political case.

Right. So is it -- I mean, end of the day...

Well, those are expedited, people are targeted. This is not that kind of case.

Right. So in -- I mean, how does -- I'm just trying to understand, is it the agents -- there must be people behind the agency who have some -- are there people's egos playing out here? Or what's really going on? I mean, what are their...

See, the thing is the agency itself works like this. I mean if you look at ED, some 1,700 cases that they have initiated in the last 9 years, they only have about 9 to 10 convictions. It's a very shaky of agency per se. They try to go after. There's no company which they've not gone after, I don't know -- that I can think of, either under FEMA or under PMLA or any other law for that matter. That is the way this agency investigates. The presence of Gautam Khaitan has rightly pointed out. This has given them that came to just look at us and see if they can find something. As of now, it's only been a roving exercise.

So where is Gautam Khaitan? Is he in custody? Or is he released on bail? Is he in the country? Is he….

Last we checked, he was released on bail. Asked my colleague, he was released on bail. I don't think he'll be allowed to leave the country, but...

Sorry?

So I don't think he'll be allowed to leave the country, given the investigation he is involved in -- the cases he's involved in.

Okay. And what -- any idea what is -- has he confessed anything? Has he made any allegations against KRBL or anything like that?

None. None as of now. None that we've at least been confronted, as of now. It's been -- the investigation has sort of been very centric on KRBL's books, KRBL Financials to try and -- that's what they're trying to see, right? They're trying to see a money trail. There haven't been able to...

As per yesterday's sort of disclosure or whatever ED has allegation, there was an amount received by KRBL DMCC, which was transferred to KRBL India. Can you just throw some further light on that? I mean, is -- what was the linkage there?

So the link there is pretty simple. The money has come back here as dividend.

No, but have they established...

Which has been declared by KRBL DMCC.

Right. But KRBL DMCC has received some money from some tainted people there? Is that established or not? I mean, is there some...

No, that is not established at all. But in fact, that's not what they have to establish. What they have to establish is that any money that KRBL received from a tainted source has then gone to a government -- gone to government officials in this country. There's not even a whisper of that, no government official, no nothing. Absolutely a straw case that they've built.

Okay. Right. And this is based on -- what is their basis again for this? I mean, how do you think they would have come up with this allegation?

It's a mere presence of Gautam Khaitan. And KRBL does have the kind of structure where you have overseas transactions. That's all you need to at least have a roving inquiry. And I don't -- I can't think of any company where it has been involved with Gautam Khaitan that is not fighting the ED at the moment. He's been one of the guys that they've identified as a troublemakers and gone after wherever he's -- or whoever he's touched, wherever he's at.

And there's no -- so the Balsharaf case came up before Embraer or they both came up simultaneously? Just again, I'm refreshing my memory, if you don't mind.

See, I'm not upheaving in the Balsharaf case. I'm not...

No, they are simultaneously, simultaneously.

Is there a link between the 2? Is Gautam Khaitan the link between the 2 cases or something?

Yes, Gautam Khaitan has also been linked with Balsharaf also.

So is the -- I mean, basically, KRBL's involvement in both these cases is because of Gautam Khaitan?

You see, in Balsharaf case, KRBL is not at all there, but Balsharaf case, also the linkage is through Gautam Khaitan and he was an Independent Director in KRBL. That is the linkage.

So, again, but if you can, sir, just help me clarify. Balsharaf case, there's nothing against us, right, against KRBL or its promoters?

Right.

It's just a matter of the shareholding of Balsharaf of 6%, which has been attached by ED, right? But there's no charges against us or -- of any type or anything to do with us. You're saying...

Nothing, nothing, nothing.

Okay. And that -- their amount also involved is INR 70 crores or something, I believe, right?

Yes, yes, yes.

So that is being fought by Balsharaf with the ED? I mean, who are the parties involved there?

Yes, ED and Balsharaf. This is between ED and Balsharaf.

And Balsharaf continues to be our distribution partner in the Middle East?

Yes. Yes, yes.

Okay. So they are still are -- I mean, we have a active association with them?

Yes, we have. And we are supporting them in all the legal cases. Since they are in Saudi Arabia and we are in India, we are giving them support to fight the legal cases. That's all.

And you have obviously stated that their stake was acquired in KRBL much before the allegations from ED, right? 2003 or 2002?

It was 2003, yes.

So I mean, obviously, they could not have acquired this stake even if they are implicated from any tainted money?

Naturally, naturally, naturally.

So I mean, as far as Balsharaf...

Sir, I'm sorry to interrupt, would you like to come back in the question queue, Mr. Sonthalia? We have next question from the line of Viraj Mehta from Equirus PMS.

Yes. Most of the questions have been answered. Actually, I don't have a question now. Just one small representation as a minority shareholder is, sir, we have been on multiple forums right from media channel to our own con calls with investors over 6 quarters that if we can do a buyback. But we haven't gone ahead with absolutely anything. Even demergers we have talked about in the past, but again, there, a lot is to be achieved. I would have -- I would seriously request management to address some of these issues.

Okay.

We have next question from the line of Manish Bhandari from Vallum Capital.

I'm so sorry to have this discussion on the legal case and it's going on for long. And as a part of the extended family, of the shareholder family, and we all are equally pained. Sir, my issue is that I find a synchronized pattern in the way ED has been releasing this on the Twitter. So is there a vendetta between KRBL and ED because of the legal cases what we are fighting? And do we need a better press management. Most -- many of the companies have seen these kind of issues way back in last 20, 25 years for the corporate history, including Dabur and everyone where that was Panama case here. But when it comes to KRBL, I find that the method of ED has been very different to what they would have employed in many other cases. So I wanted to know your views from your history of case -- dealing with this case, how you think that maybe a new method of dealing with ED has to be employed?

Yes.

Hello?

Manish?

Yes.

Manish, you see, we file so much complaints against ED to High Court, to the lower court. And everywhere, we are getting the success. And definitely, ED is a little bit on a, I mean on, front foot against KRBL. As you rightly said, if we see other companies, the vendetta against KRBL is much different. Hence we have to take the legal help. And even you see that is very important for ED to file the complaint because tomorrow High Court just can say, actually, you cannot attach the land, attach the warehouse. So to prove their point, they have gone all out to file this criminal complaint against [indiscernible] and Anoop Kumar Gupta what they have done just to show to the court, we have filed. That is the only point I guess, otherwise, there is no political vendetta, there is nothing. It is only we are quite aggressive as far as a legal battle is concerned.

Do we need, I mean to say, more battery of lawyers to support us in this? Do you think so that...

We have, and Mr. Bakhru will further light on the issue.

Yes. So no, according to us, we're very well represented in the orders, we can reflect that. If there was any lacking on that end, then they wouldn't be getting orders that we are getting.

Sure.

Every time there's a big matter, we're always represented by the best senior counsel that there is in, represented by...

Sure.

Yes, representing lawyers of Delhi.

Sir, my second question is regarding the ED has naturally targeted the softer aspect of the reputation of the company and the pattern they have followed is to how you can destroy the reputation of the company in the wider stakeholder's view. And that's the reason I see this pattern very well. So I just wanted to know that -- I mean to say on the call, on various discussions have been done by various shareholders on the way to protect the reputation of the company. So my humble suggestion is I think this is the need of the hour to see that we reply -- a befitting reply to ED by putting up the reputation back into the system. I think that's what we are targeting. It is not a case of INR 16 crore for ED to follow a case of INR 15 crores looks beyond their territory even. But it looks like that they have looked at the softer aspect of the reputation of the company and they know that we have a wider stakeholder to represent. So I think we have to find a way to give a befitting reply by restoring the reputation. And I think that is one of the most important things we can do as management at this point of time. Sir, my last question is regarding how are sales in UAE and SA, Saudi Arabia is picking? That was something which saw a patchy -- rough patch in last 2, 3 years and in last conference call, Mr. Anil did made a case about improvement there. Are we back on track? And can we see 2015 numbers?

Manish, let this talk be limited to the legal case only.

Yes, no problem.

We will definitely like to answer your questions anytime. Anytime you can call us.

Yes, yes. No, no, I'll have a call with Manish.

And as for the first...

Anoop, I'll have a call with Manish.

We have the next question from the line of Varun Darji, an investor.

Sir, my question is that I heard that we are still helping Balsharaf in their case with ED, and he continues to be our distribution partner. Now, given where we stand now, right, do you think in your mind that it is prudent enough to do -- continue to do business with Balsharaf given the pure perception that the ED or the government agencies may have against us? I'm struggling to understand why do we have to continue to support Balsharaf in their legal cases that they have with the ED? I know you've done more than $3 billion worth of business. But here, the company's reputation and the lifeline is at stake.

But Balsharaf is not wrong at all. He has won in the lower court. He has won in the High Court. For the certain point, he has won in the Supreme Court also. And he has won 2 times in the High Court. And you will be really shocked to see the High Court order, wherein they say that Balsharaf is open to file a claim of INR 400 crores against ED. This was the order in the history of Indian law that any order has passed against the government where the party can claim up to INR 400 crores from ED as damages. I mean Balsharaf's case is super strong. It's not only strong, super strong. He's not wrong at all. Why should I leave him?

Yes. So let him fight his case. Why do we want to get caught up in...

Yes, he's fighting his case because -- no, no, no. He's in Saudi Arabia. Sometimes he says we have this lawyer, you keep this lawyer, this lawyer. We just give him then the suggestion, this is a good lawyer for this case. That's all. He's sending all the fees to the lawyers directly from Saudi Arabia. We are not at all -- we are just helping him that this is a good lawyer, you can do it. That's all.

We have next question from the line of Dhruv Kashyap from Edelweiss.

On a personal note, I have spent all my life through and through in the FMCG sector and the food FMCG, building categories and brands in Unilever and Marico. And I have been a really big fan of the kind of assets that the management has created out of KRBL. It's got such strong competitive moats, and it's really been built very well. Now, adversity comes in many shapes and forms in all businesses. I am just very, very, very disappointed by the way the management and the Board hasn't acted concretely in terms of all the multiple fronts, right? So if you look at the issues that, let's say, happened with Cadbury's on the chocolate worm incident or what happened with Coke on the [indiscernible] incident. The way the companies and industries rallied around all the stakeholders, so whether it's industry bodies, consumers, investors, essentially making sure that there's a PR overdrive happening. I just don't see anything happening on KRBL on that front. It just seems to be reacting to everything. The serious paucity of controlling the narrative. Currently, the narrative seems to be controlled by the ED and the body that we seem to be reacting. I mean for a company of our size of INR 6,000 crores market cap, INR 4,500 crores top line, INR 600 crores bottom line, we should be able to throw a lot more of our weight on all stakeholders; ring-fencing the India Gate brand with consumers so that they don't feel that they're buying a fraud brand; or ring-fencing an industry or marketing body, ring-fencing the stakeholders. We just keep talking in KRBL over the last 2 years, but there seems to be no concrete action. And I'm really surprised where the management owns 60% of INR 6,000 crores which is close to about INR 3,600 crores. You are the single largest owners and you are allowing your value to be eroded like this. It's really disappointing, sir.

Let me answer, Anoop, this question. Dhruv, you are right at your end being an investor, but we have -- already we have PR agencies because there are not single problems, they're -- domestic problems are already [Technical Difficulty] Hello? Hello?

Yes, sir. please go ahead. I can hear you.

Yes. So we have 1 PR agency. We are working very hard. There are so many cases, which is around such a big company where 5,000 workers are there. They have been complaining here and there, to this court, to that court and doing so many things. Only at one place, we had the PRs, but we couldn't succeed with the ED because that was the government agency and that was -- we have given the top priority, the best lawyers we hired to ensure that nothing goes wrong, but this got elevated too much because, first of all, Gautam Khaitan, which was our mistake, we did -- we confirmed this mistake for -- in the first meeting only yes, it was our mistake, by taking him as an Independent Director. And we tried. Do not think that we never tried. We tried our level best. And because we had the best lawyers, the best advice, we are winning at every place. Just as Anoop told, in Balsharaf's case, because he has good lawyers, he has given an affidavit that KRBL has nothing to do, it is my matter of concern, and we were out on the day 1. That is why till date you have not heard anything from the ED side as far as AgustaWestland case or that whatever the money trade was, that we do not know. Yes, in this case also, we had hired the best lawyer. We got a very good order from the tribunal. And you tell me if there would have been something wrong -- seriously wrong, it has been now practically 3 years. After 3 years, the officers are changing. Let me tell you what is happening. Every 6 months, the officers are changing. Whosoever the new officer comes and he starts opening the files. Whosoever comes, he'll start opening the files. Yesterday only, Mr. Anirudh told me that now the case is over. They have filed the prosecution, there will be -- there now [Technical Difficulty] by the courts. I think that this should be the end of proceeding. Anirudh would you like to tell him -- tell them some…

See, I mean, that does happen.

Hello?

As I said, there are a lot of latches on the government end. [Technical Difficulty] part of it is institutional, part of it is [indiscernible] lethargy. And a lot of it is also the fact that they don't have much in this case. The entire government strategy was ordered to have a shakedown. That is why they're dragging the matter. That's why at least this filing of prosecution takes us closer to culmination of this case.

Just as a follow-up to that, if you look at it from an investor's point of view, and even if you look at it from you, the promoters, being 60% of the investor, right, the point is that whether you look at AgustaWestland and the overhang of whatever the amount is, you look at Embraer, you overhang, which is about, say, maybe INR 20 crores, INR 25 crores or INR 15-odd crores, you look at the Balsharaf case where it seems quite logical to say that if he has bought the stake in 2003 and the supposed alleged scam happened in 2007, then it's an illogical case completely. But all these overheads just seems to be making the investor lose money. I mean, the stock was INR 675 in 2017. It was down to INR 92 in March this year. How can anybody make money investing? I mean, unless the management has decided they don't want investors. There seems to be no action, sir. There's only talk.

The action is...

You tell me what is…

According to you action...

Sir, I told you, one, that the PR machinery, the way these multinationals like Nestlé and Cadbury's did when they had a problem, I don't see that happening with KRBL, and across the spectrum, right, across stakeholders. And secondly, I mean, there has to be some way you have to -- every investor's sitting on loss, sir, given the purchase price and currently where it is. You have to find some way to keep the investors with you, otherwise, why will anybody invest? There has to be action, sir, not talk.

You are talking about the action to be a buyback to be the decision?

Sir, any action, sir. There are 2 fronts I'm talking about. One is that what are you doing about ensuring that a consumer continues to buy India Gate and does not feel this is a tainted company or investors continue to invest thinking this is not a tainted company. Same way, sir, what do you do to make investors feel good about investing? Because currently, almost all of us are sitting on losses. What are you going to help us do to keep the faith?

As far as consumers are concerned, my market share 3 years back when this case came up, it was 30%, 31%. Today, it is 54%. So you can't say that my brand -- my brand is doing extremely good as far as consumer is concerned. But you have seen for the investor, yes, you have a good point, and you suggest, definitely look at it.

Sir, for 6 quarters, in every earnings call, you say we will look at buyback, and we will look at demerger of the wind or the power business. For 6 quarters, you've been saying it, nothing happened. So sir, I mean, do you fault people for doubting you on that?

Sir, demerger, I told you, we contact -- we have given the word to KPMG. Their [Technical Difficulty] are not ready to change the PPA [Technical Difficulty] new company. It is not possible to change the PPA. And you people are thinking that the IRR still is 20%. It's not a bad investment, but we wanted to demerge because of the voice of the investor, but all PPAs which are at INR 4.50, INR 5, they will sign it at INR 2. Why should I change any PPA to INR 2, no? So that is practically...

So what about the losses of all investors because of these issues? So in terms of a buyback/dividend, this also has been ready for 6 quarters, but there's no action. You just keep saying the Board will meet and decide. When will the Board meet and decide?

We'll look at this time. We'll [indiscernible] this time.

Sir, please be serious about this, sir. Everybody's losing money investing in this company.

No. You meant to say INR 12 to INR 600, everyone invested at INR 600?

Sir, whether invested at INR 600, INR 400, INR 300, you yourself as the owner of the company would know.

That...

Sir, you as the owner of this business would know that the value of this business should be nothing less than INR 25,000 crores, if there was no overhead -- if there's no overhang, sorry, not overhead, no overhang. So the point is that this is an undervalued business and we all collectively as stakeholders need to help each other out to realize the true value of this business. That's all that I'm saying.

Yes, exactly. You're right. And we'll look at it, definitely. Thank you very much.

We have next question from the line of [ Tanmay Shah ], an investor.

So while I feel the angst of the fellow shareholders, sir, a few suggestions for you and a few clarification questions. So first, I'll just come to suggestions, sir. Sir, actions speak louder than the voice and all the verbatim. So there are many actions possible apart from demerger. Buyback is one. You can issue bonus debentures also if you are confident of serving the debt to the shareholders. You can issue like Hindustan Lever has done, many of the consumer companies have done. They have issued bonus debentures to the unitholders -- sorry, shareholders, where you can pay over a period of time the money and the cash flow which you are confident of generating surplus cash flow. You can declare special dividend. You can do buyback. There are N number of options you have, sir, to correct the situation. Because, as I said, the actions speak louder than all the words. The rest is all commentary, sir. Secondly, sir, regarding to communication. I've interacted with Priyanka Mittal. She's done courses at Harvard. She's well spoken. Why don't we appoint her for the investor relationship? I think, sir, she gets what investors are looking for. Secondly, have promoters considered taking this company private? There is a lot of private equity money available. People are able to raise money at 1.5% abroad, sir, large companies. You can tie up with them and take this company private. Anyway, most of the shareholders are not happy with your listed status in last 3 years is the feeling we are getting. So you could take the whole company private. Now coming to the clarification thought, sir. So what was the nature of the transaction the Dubai company did? Because forget the AgustaWestland, forget the dividend, what was the services rendered by the Dubai company to be eligible to get those cash flows and the fund thing. If you can throw some light on it? Secondly, if you can publish all your -- the court orders also on the website, that would really help the shareholders understand what is happening. It's an effort to find, but I think it would help. And one more question, which is a very nagging one is normally ED, whenever there is a sham transaction, they impound the proceeds from the sale of trade transaction, here they annulled it. So there is a notional loss to the seller, right? They sold at some INR 650 plus, the buyer got away scot-free. He can buy double the quantity at current prices. So why has the seller not yet sued the government for the damages as directed by the court yet?

No. Balsharaf has already sued, and I thought that High Court had given an order of taking claim of INR 400 crores damages. But the seller was Balsharaf and the buyer was Pabrai.

They said the buyer should sue it? Has buyer sued and recovered the money from the ED for the damages done? Because they should have impounded the proceeds from the sale. ED doesn't have powers to cancel the trade actually. They can -- they could have impounded the proceeds going back. But here they annulled the case and buyer got the benefit.

It's a case.

No, but has the verdict...

Right. That is the case in High Court. Yes. It has come, it has come. You can see the High Court order.

No, no. They say -- the court has commented, sir, I read that it's a separate litigation, which has to be filed by Balsharaf to recover the money is my understanding about the court case. They have not said that...

Balsharaf…

Court has not granted the accord of INR 400 crores to Balsharaf yet. It's a separate legal case between...

No, not granted though. Yes, yes, yes.

No. So Balsharaf will have to take the legal action to recover that money. What is stopping them from taking it is my question? And secondly, sir, what was the nature of services rendered by Dubai company?

Anoop, can we answer -- Anoop, how can we answer those detailed questions about why Balsharaf is doing, why not? We have given [Technical Difficulty]

Sir, he is your distributor, so you can advise him, sir.

We cannot address it directly [Technical Difficulty]

Sir, you could advise it, right?

It is in our knowledge. It is in our knowledge and we have to answer [Technical Difficulty] have got the full rights. But as far as Balsharaf is concerned, whether he's getting, not getting what he's not getting, this is not our concern. It should be spoken by his lawyers that what they are doing and how they are doing.

Agreed, sir. But sir, he is your well-wisher, right? He's your distributor, you could always advise him, like you've been recommending him some good lawyers, so you could do this also as a matter of just courtesy.

Well, let me tell you, people, you have got a right being investor. But as far as Balsharaf case and Agusta case [Technical Difficulty] the share prices are not [Technical Difficulty] 3 years, 4 years, the type of competition we have fought, the type of market share we have gained both in abroad as well as in the domestic market, the type of branding promotion we have done. Everything we have done positive and shown excellent result [Technical Difficulty] We have not sold a single share in the market. We originally gave the shares to the investors at INR 1 or INR 10 with a premium of INR 6 [Technical Difficulty] And let me tell you as an investor, as a major shareholder in the company, we tried our best to [indiscernible] this merger. My lawyers also and anybody, we tried our level best. There will be no investment [Technical Difficulty] and all that. But certain times, [Technical Difficulty] high positions in the government are involved [Technical Difficulty] It sounds like this, that this year also, we are [Technical Difficulty] the paddy prices when we purchase, there is a difference of INR 20 crores, INR 21 [Technical Difficulty] as far as businesses is concerned, are going on very fine, but there is [Technical Difficulty] I do agree. There is only one thing with this [Technical Difficulty] we thought that [Technical Difficulty] INR 1,000 crores, we [Technical Difficulty] And to make yourself more strong financially, that [Technical Difficulty] INR 1,000. That is why every time when it came, it came that we should buy back, we should buy back. We never buy back because [Technical Difficulty] already in the market is very less. 60% is [Technical Difficulty] already with such corporates like Balsharaf and many other [Technical Difficulty] company in the market. So if we will buy back another 5%, it will be only to 13% in the market.

Sir, that would be fine, sir, you can also issue the bonus debenture. And secondly, sir, my bigger question was what was the nature of underlying transactions between the Dubai firm, which is under this thing? What were the services rendered, sir?

No, [Technical Difficulty] No, no. some people [Technical Difficulty] Hello?

Sir, this is the operator. I'm sorry to interrupt. Your voice is not very clear.

Hello?

Yes, sir, we can hear you now. Please go ahead.

Hello?

Yes, sir, we can hear you now. Please go ahead.

Yes. Some people I know are agitated and angry [Technical Difficulty] some people [Technical Difficulty] Hello? Hello?

Sir, we can hear you now.

Yes. I know some people are agitated. We can understand some people are angry, agitated because share prices went to INR 650 or INR 600 and due to one [Technical Difficulty] of the ED [Technical Difficulty] the price went down, I do agree. As a business, as a principal, as an honest business [Technical Difficulty] Hello?

Now it's clear. Now it's clear.

Hello? Hello?

Sir, we can hear you now. Go ahead.

I know some people are agitated. As an honest business man, as a good business practices, what [Technical Difficulty] Hello?

Sir, please, I'm calling you on an alternate number. You may disconnect the line and call you back and reconnect.

Hello? Can you hear me?

Sir, I'm sorry to interrupt, the voice is getting in and out. Sir, you may please continue with your question. Mr. Shah, I'm reconnecting Mr. Mittal.

Yes. No, the question is twofold. They can consider bonus debentures. And second was the nature of underlying transaction with the Dubai entity. What were the underlying services rendered? [Audio Gap]