Holy cow!

As Parag Milk Foods’ meltdown comes amid structural and management issues, investor confidence might not return in a jiffy

How often does a promoter pledge a part of his stake to increase his holding in the company? It seems counter-intuitive. But that’s exactly what the promoters of Parag Milk Foods did. All hell broke loose when a persistent query by an analyst during the Q3FY20 earnings call saw the promoter revealing that a loan was taken to increase their stake but refused to reveal the source of funding. On being probed further by analysts, Devendra Shah, executive chairman, said, “It’s a total commercial bank, don’t worry about that.”