Shanthala FMCG says Rs 7.9436 crore customer cash unbanked

Shanthala FMCG Products Limited said Rs 7.9436 crore collected from customers between April 1, 2025 and July 31, 2026 was not deposited in its bank accounts, with Rs 7.6079 crore recognised as recoverable from its former chief financial officer and equally impaired in FY 2025-26.

How much customer cash did Shanthala FMCG say was unbanked?

Shanthala FMCG said Rs 7.9436 crore of cash collected from customers from April 1, 2025 to July 31, 2026 was not deposited into its bank accounts. The forensic audit report classified the irregularity as misappropriation of company funds, and the disclosure identified former Chief Financial Officer and key managerial personnel Mr. Yogish Mallya as the person involved.

The company recognised Rs 7.6079 crore of the customer-collection amount as recoverable from the former CFO in the financial year ended March 31, 2026. It said the remaining Rs 33.57 lakh from the total Rs 7.9436 crore would be recognised for the period ended September 30, 2026, separating the accounting treatment across two reporting periods.

The cash-collection period ran from April 1, 2025 through July 31, 2026, while the principal accounting entry was made in FY 2025-26. The Rs 7.6079 crore recognised in that year was substantially larger than the Rs 33.57 lakh slated for the period ended September 30, 2026, although both amounts relate to the same Rs 7.9436 crore identified customer-cash amount.

What was the FY 2025-26 financial effect for Shanthala FMCG?

Shanthala FMCG recorded an impairment loss of Rs 7.6079 crore under exceptional items in its FY 2025-26 statement of profit and loss, equal to the amount it recognised as recoverable from the former CFO. The company said it took the impairment because recovery was uncertain, while retaining the amount as a receivable from the former CFO.

The company reported a loss after tax of Rs 5.8881 crore for FY 2025-26. Its disclosure said the Rs 7.6079 crore impairment under exceptional items resulted in that loss after tax, distinguishing the reported financial-year charge from the full Rs 7.9436 crore of customer cash not deposited over the April 2025 to July 2026 period.

The accounting treatment paired a Rs 7.6079 crore recoverable balance with an impairment loss of the same amount in FY 2025-26. The remaining Rs 33.57 lakh was not included in that stated FY 2025-26 recoverable-and-impairment figure, as the company said it would recognise that amount for the period ended September 30, 2026.

What other transactions did Shanthala FMCG disclose?

Shanthala FMCG disclosed that Rs 5.6919 crore was transferred to two related parties during FY 2025-26 without obtaining the requisite approvals of the Audit Committee and Board of Directors, where applicable. Of that amount, Rs 57.84 lakh remained outstanding from a subsidiary as at March 31, 2026.

The Rs 5.6919 crore related-party transfers were disclosed separately from the Rs 7.9436 crore in customer cash collections that was not deposited. The filing described different mechanisms for the two matters: unbanked customer collections on one hand, and transfers to two related parties without stated approvals on the other. It did not combine them into a single loss amount.

The company said Mr. Santosh Kudva, a director, suspected discrepancies in April 2026 during a visit to the registered office. Shanthala FMCG then conducted a forensic audit covering April 1, 2025 to July 31, 2026, and said the forensic audit report subsequently established the misappropriation of funds.

Shanthala FMCG also said it had withdrawn distributorship arrangements with major vendors, referring to prior stock-exchange disclosures dated May 13, 2026 and August 6, 2026. The November 13, 2026 filing did not name those vendors or quantify the financial impact of the withdrawals, but included the point alongside the forensic findings.

What action has Shanthala FMCG taken after the forensic findings?

Shanthala FMCG removed Mr. Yogish Mallya as Chief Financial Officer at a Board meeting on October 31, 2026, after providing him what it described as an adequate opportunity to be heard. The November 13, 2026 standalone disclosure followed an October 12, 2026 disclosure on submission of the forensic audit report and an October 31, 2026 Board-meeting outcome.

The company said it is actively pursuing recovery of the outstanding amount from the former CFO and that management is discussing remedial legal measures with lawyers. Its corrective measures include preserving records and digital evidence, reconciling customer collections against bank entries, reviewing approval matters and related-party transactions, and independently testing strengthened internal financial controls and approval mechanisms.

Shanthala FMCG said its statutory auditors noted that the matter falls under Section 143(12) of the Companies Act, 2013. The company answered yes to whether the matter had been reported to appropriate authorities, while the auditors said Form ADT-4 would be filed with the Central Government.

Conclusion

Shanthala FMCG’s November 13, 2026 disclosure identifies two separate issues: Rs 7.9436 crore in customer collections not deposited between April 2025 and July 2026, and Rs 5.6919 crore transferred to two related parties during FY 2025-26 without the stated approvals. The company recognised and impaired Rs 7.6079 crore in FY 2025-26, when it reported a Rs 5.8881 crore loss after tax.

The next disclosed matters to watch are recognition of Rs 33.57 lakh for the period ended September 30, 2026, recovery efforts against the former CFO and management’s proposed legal measures. Shanthala FMCG has also outlined a plan to reconcile customer collections and bank entries, review related-party approvals, test strengthened controls independently and support the filing of Form ADT-4 with the Central Government.