Kohinoor Foods: Qualified Audit, CFO Exit, ₹926 Cr Debt Order Spell Trouble

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AuthorAbhay Singh|Published at:
Kohinoor Foods: Qualified Audit, CFO Exit, ₹926 Cr Debt Order Spell Trouble
Overview

Kohinoor Foods announced Q3 FY26 results alongside a qualified audit conclusion. The company faces significant financial distress, including substantial unprovided interest on NPAs, a ₹926 Crore DRT order, multiple IBC petitions, and a SEBI show-cause notice. CFO Pradeep Goswami has resigned, with Prabhat Kumar taking over. Management deems it a going concern based on a recent OTS and asset sale.

📉 The Financial Deep Dive

The Board of Directors of Kohinoor Foods Limited has approved the un-audited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025. However, the specific financial figures (Revenue, PAT, EPS, etc.) for these periods are not disclosed in the provided text.

The Quality & Going Concern

The statutory auditors have issued a Qualified Conclusion on the financial results. This is primarily due to the company's decision not to provide interest on bank loans classified as NPA (₹3780.72 lacs for the quarter, ₹83514.80 lacs year-to-date) and on revoked corporate guarantees (₹80.90 lacs for the quarter, ₹1443.94 lacs year-to-date). Furthermore, there is a lack of reconciliation with banks.

The company has entered into a One Time Settlement (OTS) with its lenders, depositing the full amount of ₹227.45 Crores with interest. Additionally, its rice manufacturing unit has been demonetized for ₹190.00 Crores, with the buyer depositing full consideration with lenders, though the sale deed is pending registration. Management assesses the company continues to be a going concern based on this revised OTS.

⛽ The Grill: Unprecedented Distress & Legal Battles

Kohinoor Foods is facing a severe barrage of legal and regulatory challenges:

  • Debt Recovery Tribunal (DRT) Proceedings: An ex-parte Interim Order from June 2020 restrains the transfer/disposal of hypothecated assets and immovable properties. A Lead Bank petition resulted in a DRT order on October 28, 2025, directing payment of INR 926.13 Crores within 30 days, failing which recovery from asset sales will occur.
  • Insolvency and Bankruptcy Code (IBC) Petitions: Secured creditors (PNB and IDBI Bank) have filed petitions under Section 7 before NCLT Chandigarh, with hearings scheduled for April 20, 2026. An interim stay was granted by the Punjab & Haryana High Court concerning the PNB petition.
  • Execution Petitions & Attachment Warrants: A vendor filed an execution petition, leading to a warrant of attachment for all three properties. Attachment was executed on the Surajkund property and a PNB bank account. While the Delhi High Court stayed an award subject to deposit, the Faridabad Court ordered a vacation of the attachment for the PNB account. The company is contesting these Faridabad proceedings.
  • Municipal Corporation Notice: A notice was issued to the Builder of Pinnacle Tower for vacating premises, though the builder secured an interim stay from the High Court.
  • SEBI Show Cause Notice: Issued to Directors and the Company, with a settlement application filed and a reply submitted.
  • Unprovided Demands: Non-provision for demands from Income Tax and GST authorities, and interest on late payments to MSME creditors.
  • Governance Change: The Chief Financial Officer, Mr. Pradeep Goswami, resigned, and Mr. Prabhat Kumar has been appointed as the new CFO.

🚩 Risks & Outlook

The qualified audit conclusion and the sheer volume of ongoing litigation (DRT, IBC, execution, SEBI) present immense risks. The company's survival hinges critically on the successful completion of the OTS and the asset sale, and its ability to navigate these legal hurdles. The going concern assumption, while stated by management, appears highly contingent and fragile. Investors must exercise extreme caution.

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