Gitanjali Gems chief Mehul Choksi, Prime Securities among 26 barred from stock markets

SEBI as well bourses NSE, BSE and MCX-SX has decided to suspend 'unique client codes' of the 26 entities, including Gitanjali Gems' managing director and Prime Securities from trading for six months due to suspected market manipulation

Market regulator Securities and Exchange Board of India (SEBI) and bourses have barred Gitanjali Gems’ promoter Mehul Choksi and other 25 entities in relation with suspected market manipulation. This follows an investigation carried out by SEBI and National Stock Exchange (NSE) into the trading activities of Prime Broking Co (India) Ltd and trading in Gitanjali Gems by these entities.

 

In a similar circular issued late on Thursday, NSE, BSE and MCX-SX said, "Pursuant to the decision of SEBI and NSE which are investigating the trading activity of Prime Broking Company (India) Ltd and trading in Gitanjali Gems Ltd by set of clients, Unique Client Code (UCC) in respect of 26 entities/ persons are disabled from trading with immediate effect for a period of 6 months or till conclusion of investigation by NSE, whichever is earlier".

 

Here is the list of entities barred from the stock markets by SEBI and the bourses…

 

Name of the entity

PAN

Albers Diamonds Private Limited

AAICA4525F

Avtar Gems Private Limited

AAICA4526G

CLT Investments Pvt Ltd

AAACC9692D

CSA Holding Private Limited

AAACA7112Q

Facet Electronic & Electrical Private Limited

AABCF7275L

Fender Mercantile Private Limited

AABCF8631J

Jaiwanti Mercantiles Pvt Limited

AACCJ5103C

Jinal Infratech Private Limited

AACCJ8001B

Jinal Mercantile Private Limited

AACCJ7270J

Magnifique Gems Private Limited

AAGCM5160N

Manoj Madhav Vankar

ABWPV6447M

Mehul Choksi

AABPC1451E

Pinky Agro Foods Private Limited

AAGCP0004N

Prime Research And Advisory Ltd

AAACP3122F

Prime Securities Ltd

AAACP4089M

Primesec Investments Limited

AAECP4400C

Rhoda Infrastructure Private Limited

AAFCR1087C

Rishabh Technomarine Private Limited

AAECR1364D

Sadhiv Mercantile Private Limited

AAPCS0583G

Sancheti Properties Private Limited

AAKCS4345R

Sarvin Mercantile Pvt Ltd

AARCS1698C

Shraddha Garments Private Limited

AAPCS2367C

Sneaking Infrastructure Private Limited

AAPCS7733L

Somerset Infrastructure Private Limited

AARCS4229D

Trusha Infrastructure Pvt Ltd

AAECT0919N

Vankars Gems & Jewelleries  Private Limited

AADCV6467A

 

All these 26 entities are suspected to be linked to Prime Broking. As of March 2013, Mehul Choksi, managing director of Gitanjali Gems held 51.62% stake, while Prome Broking had 1.85% stake in the company. Life Insurance Corporation of India (LIC) and Bennett Coleman and Company Ltd, the publisher of Times of India hold 4.36% and 1.73% stake, respectively in Gitanjali Gems.

 

While the investigations are continuing, the stock exchanges - including NSE, BSE and MCX-SX - decided to suspend 'unique client codes' of the 26 entities from trading for a period of six months, or till the conclusion of the probe, whichever is earlier, they said in similar circulars.

 

Shares of Gitanjali Gems closed Thursday 4.7% down at Rs109.85. The share has been continuously falling over the last month, locked in lower circuit on most days. It has fallen 75% from Rs550 on June 18th to Rs109.85 yesterday.

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COMMENTS

sanjay

5 years ago

There are several other stocks & entities involved in this blatant white collar crime . how to stop this ??

Ramesh Poapt

5 years ago

Equity investment is, sometime, about 'wealth management'-but 'disaster management'!

Ashok Leyland reports quarterly net loss for the first time in 12 years

Poor revenues on account of lower volumes, discount on trucks, higher fixed costs and increasing finance costs negatively impacted the bottom line of the company.

After disappointing Q4FY13 results Ashok Leyland reports a net loss of Rs141.75 crore in Q1FY14. This was the first time since its first quarter results of FY2001-02 that the company recorded a net loss over a quarter. The company had posted a net loss of Rs9.40 crore in the first quarter of FY2001-02. Operating profit too, slid to its lowest since that reported in the June 2009 quarter. The operating profit of India’s No.2 truck-maker fell by 90% y-o-y to Rs23.25 crore from Rs240.70 crore in the same period last year. 
 

In the first quarter of this fiscal year, the company recorded a 22% y-o-y (year-on-year) decline in revenues. Revenues fell to Rs2,363.81 crore from Rs3,026.89 crore reported for the same quarter last year. Lower contribution of M&HCVs and historically high discount of approximately Rs159,000 per vehicle affected revenues drastically. “Industry conditions remain tough, which is leading to higher discounts and impacting profitability,” mentions research firm Nomura.
 

According to other research reports, the weak economy affected the high margin medium & heavy commercial vehicles (M&HCV) segment which reported a decline of 27% y-o-y. Volumes declined by 37.30% qoq to to 21,721 units from 34,627 units in Q4FY13. Over the year, volumes declined by 21.50% y-o-y from 27,669 units in Q1FY13. The slowdown has even impacted the light commercial vehicle segment which declined by 6% y-o-y. Finance costs increased by 21% y-o-y to Rs100.67 crore due to higher working capital related to high inventory during the quarter.
 

According to a research report from Karvy Stock Broking, “exports declined 22.3% y-o-y to 2,334 units, primarily on account of ~74% Y-o-y fall in its exports to Sri Lanka to 340 units in Q1FY14, while management indicated improvement in other geographies of Middle‐East & Africa.” The broking firm also mentions that “In addition to ongoing M&HCV slowdown and LCVs begun declining, Ashok Leyland also started losing market‐share in both the segments, which will result in lower volume, going forward.”
 

Ashok Leyland also announced capex and investment to the tune of Rs200 crore each for FY14E, which would lower its interest burden, going forward. The company has hiked prices by approximately Rs 20,000 per vehicle at the beginning of July’13, which should benefit the company going forward.

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COMMENTS

Gool Daruwalla

5 years ago

What about competiton from Bharat Benz ?? This company has 13 new truck models lined up for Indian market. Tata is a tough competitor too in certain segments. Incidentally what is surprising is that a year back Equity Master was recommending a buy for Ashik Leylnd at Rs24 - 25/= the price fluctuated between 18/= to 27/=. Equity Master had given a first target of 32/= and a 2nd target of 50/= none of them were reached. Also recently there were some press reports of various order book size of 200 buses for Ashok Leyland in India and 2000 buses for Africa etc. Are these manupilative in nature. It is a good time to accumulate the stock but watch the compettion too. CMP is 15/=

Hold on to your shares: Yes Bank tells its shareholders

After its share price plummeted 13% in the last few days Yes Bank sent a mailer to all its “valued” shareholders” citing broker research reports to hold on to their dear stock even as it prepares to declare quarterly results. Is SEBI concerned at all?

In a strange move, Yes Bank encouraged its shareholders to hold on to their stocks, citing stock brokers research recommendations. This is peculiar because it is not a usual practice to write to shareholders about stock valuation, especially before a quarterly result announcement due on July 24. Since 15 July, the company’s share price has taken a beating, plummeting over 13% from Rs500 to Rs433 at the time of writing this piece after Reserve Bank of India (RBI) tightened liquidity measures (which is likely to affect banks in the upcoming quarter, and beyond). The incumbent management is also involved in a nasty controversy involving the two promoter families, which has now become public. Yes Bank probably fears that its efforts to raise capital could be hampered, if its share price was to decline further. If that is so, it has surely chosen a funny way to deal with it.
 

The bank’s “Financial & Investor Strategy” team, whatever this means, sent a mailer to all its “valued” shareholders stating, “Despite the recent correction in the stock, leading brokerage houses have maintained their positive outlook on the stock with a strong expected growth outlook in earnings and profits.” It pointed out that “leading brokerage firms” like of Morgan Stanley and Goldman Sachs attached “BUY” recommendations.
 

How much value is there in these recommendations? It is pertinent to note that Morgan Stanley and Goldman Sachs were lead managers to Yes Bank’s previous qualified institutional placement (QIP) issue, in 2010. Apart from fixating on Goldman Sachs and Morgan Stanley analyses (and that too in detail), the mailer goes on to mention the likes of JM Financial Institutional Securities, Merrill Lynch, HSBC, Macquarie, Deutsche, all of which gave BUY ratings.
 

Furthermore, Yes Bank’s mailer mentioned specifics that are usually mentioned in an earnings release, clearly to boost its share price and give its “valued” shareholders a glimmer of hope. It said, “Diversity of deposits has improved significantly over the past 3 years on the back of retail deposit and CASA (current account-savings account) traction, CASA as at March 31, 2013 at 18.9%. More than 86% of deposits are from depositors contributing less than 0.20% of total deposit base individually. Yes Bank has limited concentration in deposit base. Yes Bank runs a positive interest rate gap in the short term (less than 6 months) bucket, hence with the current tightness in liquidity, increase in rates may have beneficial impact on margins.”
 

Yes Bank has diluted its equity base by 32.8%, since 2006. It has raised equity capital three times—Rs120 crore in December 2006 and Rs330 crore in December 2007. In January 2010, the bank raised Rs1,034 crore through a placement of shares to QIBs. In 2006, the equity base was Rs270 crore. Now it is Rs358.62 crore.
 

And now it has plans to hike foreign equity participation, by up to 60%, vis-a-vis global depository receipts (GDRs) or another QIP issue. In fact, in Yes Bank’s recent annual general meeting on 8 June 2013, the resolution to raise as much as $500 million was unanimously passed. In the AGM press release, Rana Kapoor, managing director and chief executive officer (CEO), talked of “deepening shareholder register” and widening “investor classes” but made no mention of minority shareholders and mentioned only qualified institutional investors and domestic institutional investors.
 

Furthermore, the family feud has been the talk of Dalal Street of late, which has embarrassed company’s officials. The two promoter families are feuding about board seats.
Madhu Kapur, widow of late Ashok Kapur (brother-in-law of Rana Kapoor) has sought to nominate her daughter Shagun Kapur Gogia, legal heir to Ashok Kapur’s 12% stake in the bank, to the board of Yes Bank. However, the Board of Directors of Yes Bank rejected her offer. Ms Kapur then petitioned the Bombay High Court, seeking the court intervention in the case. Moreover, she also has sought the court intervention to quash appointment of three directors of the bank namely Sanjay Palve, Rajat Monga and Pralay Mondal. She also alleges that the annual general meeting held on June 8 was not conducted in a proper manner and has asked the Court to direct Yes Bank to provide minutes of meeting as well as video recordings. The Court will give the final hearing on July 29.
 

There are allegations, according to the Economic Times, that Rana Kapoor’s loan got waived off by Rabobank, an erstwhile strategic shareholder of Yes Bank. Ms Madhu Kapur, the widow of late co-promoter Ashok Kapur (Rana Kapur’s brother-in-law) alleged that Rabobank forced Ashok Kapur to sell off his shares to repay the loan given to him. Recently, it was reported that Rana Kapoor’s family bought a house for an extravagant Rs128 crore next to Mukesh Ambani’s Antilla, on the ritzy Altamount Road in Mumbai.
 

Yes Bank recently was levied Rs2 crore penalty by RBI for failing to adhere to KYC and anti-money laundering norms.
 

Yes Bank is among the banks that do not disclose charges in its website such as number of free transactions at other bank ATMs in India and replacement of damaged debit cards, which is in violation of RBI circular. The story can be accessed here.

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COMMENTS

Prasenjit Kumar Paul

5 years ago

This article is biased. I am a shareholder of Yes Bank and won't receive such mails.

Even if it do so,What's the Problem?? Are they force anybody to hold their shares??

They have best corporate governance,best managed bank.Can you imagine their NPA is only 0.01%..

I have also savings account in Yes bank. All their ATM transactions are free be it 5 or 10 or 15 per month from any other ATM.They are offering highest interest in savings account.Which nobody can offer.

Kindly include those points

rajeshpai

5 years ago

Hi,
The article seems biased which Moneylife is normally not.
A lot of extraneous items have been brought in unnecessarily.
If Rabo Bank waives off its loan to Rana Kapoor it is its prerogative.You have to ask RaboBank as to why it waived off.They did not do anything illegal if their lender decides to waive off its loan.

And what is the problem if they bought an expensive real estate next to Antilla.If they have the money let them buy.If the money was not properly accounted, the Income Tax department will go after them.If I had a thousand crores with me I too would have liked to buy that property.

As for RBI fining Yes Bank, you should have also mentioned all the banks that were fined and not just Yes Bank.

Yes Bank has been performing very well on all fronts.It has been innovative and knows its business.Its NPAs are one of the lowest.It has spent very well on IT and getting benefit out of it.It is not for nothing that leading brokerages have consistently put a BUY on it.

Anil Gupta

5 years ago

Is it not akin to insider trading?Being privi to some insider informations and having "manipulated" a favorable recommendation from some leading brokers, writing such a letter to stockholders amount to manipulate share trading through insider pursuasion.This is nothing short of insider trading.SEBI and RBI should take strong action on this.

chandra

5 years ago

Is sebi listening?

sathyacumaran

5 years ago

SATHYACUMARAN
THE SEBI AND STOCK EXCHANGES OF INDIA WHEN THE STOCK GET PLUNGED THE BROKERS NORMALLY WHO TRADE ON MARGIN FUNDING WHETHER THE CLIENT REQUEST FOR MARGIN FUNDING OR NOT THEY MAP THE CLIENT ON BOTH THE SEGMENT THAT IS ON ONLINE CLIENT AS WELL AS OFFLINE CLEINT AND THEY DITCH THEIR CLIENT THAT IS REASON WHY THE STOCK MARKET IS IN PRIMITIVE STAGE FOR AN POPULATION LIKE INDIA AND THAT TO EARNING PER CAPITA OF INCOME OF AVERAGE INDIAN IS ABOVE AND PEOPLE DESIST FROM ENTERING INTO STOCK AMRKET BECAUSE THE RULE MAKER AS WELL BROKER BOTH OF THEM CHEAT AND DECIET THE CITIZEN OF INDIAN THIS THE PYTHETIC CONDITION OF INDIAN INVESTORS AND THEY ARE TOSSED FROM PILLAR TO POST BY SEBI AND STOCK EXCHANGES AUTHROITY WITHOUT TAKING ANY ACTION BECAUSE THESE INSTITUTION IS FILLED WITH SO MUCH CORRUPTION ONCE THIS SCAM COMES OUT THE OFFICIAL SCAM WOULD SURPASS ALL OTHER SCAM IN THE WORLD AS RIGHTLY SAID BY FORMER WORLD BANK CHIEF IF THE BLACKMAIL AND CORRUPTION IS REDUCED INDIA COULD FUND FOR MANY COUNTRIES AND THEY CAN EVEN LEND FOR WORLD BANK SUCH IS STAGE OF INDIA AS SUCH WHAT EVER THE COMPANY SAYS THE BROKERS WOULD NEVER LISTEN BECAUSE THE STOCK BROKING COMMUNITY AS WHOLE INTERESTED IN LOOTING THE MONEY FROM THE INDIAN INVESTORS AND CORPORATE GIANTS WHEN THE CORPORATE GIANTS PLEDGE THEIR SHARES WITH THESE BROKER AND THE MANAGEMENT SHOULD OBLIGE FOR BROKERS MUSIC OTHERWISE THE THESE BROKER WOULD SELL THE SHARE AND THERE BY THE SHARE PRICE WOULD FALL AND THERE BY PUT THE COMPANY IN FINANCIAL CRISIS THIS STATE OF INDIAN STOCK BROKER

SATHYA CUMARAN
09444021822

Vinayak Bhimarao Mudholkar

5 years ago

If I am not mistaken; Yes Bank was one of the top 50 corporate governance ranks in the world & Infy was one of the 20 !!!

REPLY

pravsemilo

In Reply to Vinayak Bhimarao Mudholkar 5 years ago

And so are TCS and blue chip IT companies the best employers.

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