Insider trading in AstraZeneca Pharma?
Moneylife Digital Team 12 March 2014

One day before AstraZeneca Pharma announced delisting, its volumes spurted and share prices shot up by 9.13%. Could it be a case of insider trading?

On 3rd March AstraZeneca Pharma India Ltd, (AZ India) announced that its promoters AstraZeneca Pharmaceuticals AB (AZP AB) Sweden, will delist its shares. Because of this announcement, the share price shot up. But why was there a sudden increase in its turnover one day before the delisting announcement?

 

The sudden unusual rise in its turnover during three trading days seems fishy. The stock rose by Rs77.75 a day before its public announcement and just the day after, it fell by Rs107.40. Take a look at the following data:
 

The AstraZeneca Pharma India Prices on BSE

Date

Open
Price

High

Price

Low

Price

Close

Price

Close-Open

Total Turnover

28/2/2014

848

955

845

925.75

77.75

11,94,52,439

03/3/2014

1,110.90

1,110.90

1,110.90

1,110.90

0

97,50,369

04/3/2014

1,238.00

1,285.00

1,177.60

1,238.85

0.85

30,17,22,484


On 28th February, Friday, there was significant increase in its total turnover of its shares. The stock opened at Rs848 made day high at Rs955 and closed 9.16% up at Rs925.75;

On 3 March, Monday, it opened Rs185.15 higher at Rs1,110.90 price and closed at Rs1,110.90 same as its open price because shares were locked in upper circuit. AZ India announced the delisting offer on the same day;

On 4 March 2014, just a day after announcement, AZ India opened Rs127.10 higher at Rs1,238 than its previous closing price but fell by Rs107.40 to a day low of Rs1,177.60 and closed Rs46 down at Rs1,238.85

On 5 March, board of directors of AZ India announced that it seeks additional information from its Sweden based promoter AZP AB.

The suspicious spurt in volumes and price in this company calls for an investigations by the market regulator. But then while insider trading is rife in India, SEBI rarely acts, despite having spent Rs40 odd crore in sophisticated inter-market surveillance system.

 

The regulatory filing of AZ India mentions that it received scanned letter by email from its promoters regarding its voluntary delisting offer on 1 March, Saturday. If anyone had inside information about its delisting, a day before on 28th February, he/she would have bought heavily into the counter and sold it on 4th March at a handsome profit in just two days.
 

AZP AB, the Sweden-based promoter currently holds 75% of the total paid-up share capital of its subsidiary AZ India. As on December 2013, FIIs held 15.93% in AZ India. However, As per SEBI rules on delisting, AZP AB needed to buy an additional 15 % to raise its stake to 90% to delist.
 

Moneylife earlier wrote about, The deadly delisting itch of AstraZeneca Pharma India,  explaining how AstraZeneca is on course to achieve its decade-long plan to delist its shares from the Indian bourses by hook or by crook.

Comments
SUNIL KUMAR HEMNANI
8 years ago
Yes a feature of this company has become that it should be announced. Every year or when the insiders decide they need to create a news to take up the stock.We come across such a instance , I have been a victim of such a fraud by the company in the past.This proved for me a situation wherein a very big loss had to be taken by me.
Sreepathid
8 years ago
What about L&T finance. Before the announcement by NSE that the shares will be included in F&O the share prices moved.
sathyacumaran
8 years ago
sathyacumaran
Its not the only share that is traded inside trading there are quiet alot all the inside traders are patronised by sebi nse bse they knew very well who is operation g in whcih counter and the officials get their due share in the insider trading and one fine morning they would that we are going to release about yor inside trading and some of brokers should be caught and among the brokers they would be scape goat and after this episode nobody knew what happened and as such all in conspicracy with sebi nse bse is my conclusion if the sebi nse bse wants they bring the broker to very great extent and loot the investors money similarily viceversa so without their knowledge noting is done so all their saying of insider trading is just an crocodile tears to fool the investor
sathyacumaran
8 years ago
sathyacumaran
when the share price goes up the sebi normal procedure is accuse as inside trader when they find first day itself its going up why do they keep quiet infact they would have sent feelers to company about the movement when the company had not responded properly then they would raise the issue like inside trading its all the officials of sebi nse bse who lure the brokers and company to do inside trading after this they would accuse the company and afterwards they would keep quiet and what action taken by the inside trader the comapny and broker are kept mum this shows that their due share is received so the matter is kept in cold storage how the investors case even though they have fact they would not take any action similar would be case is my surmise
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