Stock Manipulation
Meglon Infra-Real Limited's stock rises in 19 months

In just over 19 months, the share price of Meglon has run up 410%. Meglon has been reporting sales of just Rs2 lakh-Rs4 lakh over the past 11 quarters and hardly any profit

 

Meglon Infra–Real Limited (Meglon) has changed its name five times since its incorporation in 1987. It was earlier in the financial services and was known as Leafin Investments. The name was changed to Leafin Financial Services and then to Canaan International Credicap. In 1999, during the dotcom boom, it conveniently ventured into the information technology and changed its name to Canaan International Infotech. In 2010, Meglon decided to shift its focus to realty; hence, the present name. Meglon has been reporting sales of just Rs2 lakh-Rs4 lakh over the past 11 quarters and hardly any profit in any of these quarters. But, of course, what have fundamentals got to do with the stock price? In just over 19 months, the share price of Meglon has run up from Rs2.46 on 8 January 2013 to Rs12.55 on 8 August 2014—a rise of 410%. This is despite the fact that the stock is under the periodic call-auction system because it is thinly traded. Meglon has been pulled up by the exchanges several times in the past for compliance issues and has even been suspended for trading. But the regulators can’t be bothered about the rampant market manipulation.

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Stock Manipulation: PMC Fincorp

Over the past year, the stock price of PMC Fincorp shot up by a whopping 1122% or  12 times

 

Earlier known as Priti Mercantile Company, the company changed its name to PMC Fincorp on 8 May 2014 and has its corporate office in Kanpur (Uttar Pradesh). PMC Fincorp’s annual report for FY12-13 states that the company is engaged in trading in shares, provides financial services and undertakes investment activities. PMC claims to offer loans against property, personal loans, inter-corporate deposit, etc. Over the past four quarters (September 2013 to June 2014), PMC has reported total revenue of just Rs15.45 crore and net profit of Rs3.72 core. Its market-cap? An astounding Rs3,500 crore! Over the past year, the stock price of this company shot up by a whopping 1122%, or 12 times, to Rs700.55 as on 28 July 2014 from Rs57.31 as on 19 March 2013. The stock price is over 900 times the earnings (past four quarters) per share. The high valuation does not seem to deter ‘investors’—whoever they are. Over the past year, the trading turnover of the stock has averaged Rs1.31 crore per day with an average of around 350 trades a day. As expected, this rampant case of trading manipulation remains unnoticed by the regulators.

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COMMENTS

Madhur Aggarwal

3 years ago

Plz follow this story
- How such kind of malpractises
are allowed to breed and thrive in
an economic system.
There must be some lacuna in Indias capital market
which has been used to full effect by such promoters.

Apathy of India Regulators

Suiketu Shah

3 years ago

Great ml covers such stocks to stay away from.One such stock which fooled public was fake herbal cosmetics maker Amar remedies

Unquoted: Midland Polymers
Despite no business activity for years, the stock price of Midland has shot up by 271%
 

Midland Polymers used to manufacture polypropylene film used in packaging. Its plant was shut in 2009 and, since then, there has been no income from operations. In 2013, this Indore-based company started ‘exploring’ projects in textiles, pharmaceuticals, securities trading and real estate. However, none of these businesses has taken shape and no operating income has been reported over the past year. The only income generated has been from interest on investments. Midland has been suspended in the past for not complying with listing agreement. It has also failed to comply with other regulatory requirements (submitting shareholding pattern and corporate governance report). For the quarter ended March 2014, Midland reported ‘other income’ of Rs42 lakh and net profit of Rs18 lakh. You would think that the share price of a dormant company would also remain dormant. Not in India where stocks can be manipulated at will. Despite no business activity for years, the stock price of Midland has shot up by 271% from Rs5.66 on 1 January 2013 to Rs21 on 10th July this year. We don’t expect the market regulator or the stock exchange to either notice this rampant manipulation or do anything about it. 

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