Heranba Litigations

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Heranba Industries Ltd (HIL)., incorporated in 1992, is a crop protection chemical manufacturer and exporter operating in the Agrochemical Industry. It has 3 manufacturing units in Vapi, Gujarat. The company manufactures- Intermediates, Technicals, and Formulations, which I have already discussed on my YouTube Channel. Today’s weekend special blog is about the Outstanding Litigations and Future Plans of the Company. So, here we go!

1.Civil Proceedings -

Against HIL:

An appeal has been filed against the Company to recover losses for an aggregate amount of Rs. 0.96 million due to usage of HIL’s pesticides. Another Civil suit for compensation of damages caused by HIL to the Plaintiff has been filed.

Filed By HIL:

7 proceedings filed by HIL for recovery of sales for an aggregate amount of Rs. 3.58 million against various parties are pending before the Court. Several Compounding Applications (settlement for an offense committed) have been filed by the company before the Registrar of Companies, Ahmedabad for violation of 8 sections under the Companies Act, 2013. All these cases are pending hearing.

Against Promoters and Directors of HIL:

4 cases for the recovery of Sales made to Shakti Bio for an aggregate amount of Rs. 5.2 million against Shakti Bio Science Limited, including Promoter and Director, Mr. Sadashiv K. Shetty are pending before the Court.

2.Criminal Proceedings -

Against HIL:

15 criminal proceedings have been filed by several Insecticide Inspectors, against the Company, including Promoter & Director, Mr. Raghuram K. Shetty under the Insecticides Act, 1968. The insecticides manufactured and/or supplied by HIL are allegedly misbranded because the active ingredient contents used in the product were not up to the specified standards. Mr. Raghuram K. Shetty has filed several cases to discharge such complaints. However, the hearing for the same is pending for all the cases. The Gujarat Pollution Control Board has filed 2 criminal proceedings against the Company for the Violation of few Environmental Regulations which are still pending. A complaint relating to wrongful disposal of hazardous & toxic chemicals in the Forest area of Gujarat is filed by the Divisional Forest Officer, Gujarat. The case is still pending.

Filed By HIL:

There are 526 Criminal complaints filed by HIL! These proceedings are regarding allegedly dishonored cheques received from varied businesses for goods supplied to them by HIL. It amounts to Rs. 270.73 million and are pending before various courts in India. Apart from this, the company has filed a Criminal Appeal for an outstanding receivable of Rs. 0.84 million.

Against Promoters and Directors of HIL:

The Income Tax Department has filed a case against Mr. Sadashiv Shetty (Promoter & Director) and his son- Mr. Shriraj S. Shetty for allegedly omitting/evading payment of Rs. 24.69 million for the year 2014-15 & it’s still pending.

5 more cases of allegedly dishonored cheques for an aggregate amount of Rs. 2.44 million against Shakti Bio Science Limited, including Promoter and Director, Mr. Sadashiv K. Shetty are pending before the Court.

Future Plans of the Company:

HIL plans on enhancing its production and operation capacity by adding new reactors and automated facilities for packaging and recently added land at Syakha in Dahej, Gujrat for further enhancement of operations. HIL is developing new products mainly of molecules going off-patent in the near future for exclusive sale in the European and USA markets. The company will focus on seeking registrations to increase the portfolio of formulations and technical and growing its business in the international markets. Lastly, HIL aims to increase the manufacturing and sales of Formulations under their brands (Jayam, Progress Plus, Mantra, Tulip, etc.) in India.

Closing Thoughts:

All these cases as mentioned in the RHP are pending and their hearing shall come up in the normal course. The allegations discussed above are punishable concerning its Acts and might lead to imprisonment or a fine or both. However, none of these proceedings were found to be severe in my opinion. Investors need to be cautious before making an investment decision in this Company.

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Heranba Litigations

1.Civil Proceedings -

2.Criminal Proceedings -

Future Plans of the Company:

Closing Thoughts:

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