Stock Manipulation: Noble Explochem

Despite no business activity since 2006, in just over a year, the price of Nobel Explochem shot up by 1235%

 

Established in 1982, Noble Explochem (Noble) was a leading manufacturer of nitro-glycerine-based explosives. In April 2004, the government prohibited the possession, sale and use of nitro-glycerine-based explosives, leading Noble to discontinue its manufacturing activities. The company, then, ventured into new business activities but was unable to make profits. The promoters offloaded their stake in the following years reducing it to around 15% from 65%. In November 2006, Noble stopped all business due to financial crisis and labour unrest. The defunct company has incurred losses in the past 10 financial years and the total net worth is eroded. In July 2011, the Board for Industrial and Financial Reconstruction (BIFR) declared Noble as a sick industrial unit. Despite nil revenues, the stock has attracted trading interest. Astonishingly, in just over a year, the price shot up by 1235%, to Rs6.81 on 15 September 2014 from Rs0.51 on 23 August 2013. Since then, the price has dropped by 32% to Rs4.66 on 3 February 2015; yet, it is up 814% from its low in August 2013. But the regulators don’t find this suspect.

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    Stock manipulation: Midas Infra Trade
    Midas Infra Trade gained a stupendous 1104% in 18 months, with almost no income
     

    Midas Infra Trade Ltd (MITL) is supposedly in the business of ‘share trading’. Prior to April 2014, MITL was known as Associated Finlease Ltd. It is a dormant company. It reports marginal income from its trading activities. With almost nil net profits, in an 18-month period, the stock of MITL gained a stupendous 1104%—from Rs0.95 on 23 May 2013 to Rs11.44 on 5 November 2014. Since then, the stock price has fallen 46% to Rs6.15 on 23 January 2015. Over this period, the promoters have been reducing their stake. In just a year, they have reduced their stake to 0.35% on September 2014 from 8.85% in September 2013. This suspicious activity did not raise a red flag, despite the regulator and the Exchanges being aware of MITL’s mismanagement in the past. In 2000, MITL’s certificate of registration as a non-banking finance company was rejected by the Reserve Bank of India (RBI) and it was prohibited from accepting deposits. Yet, in 2010, MITL collected money from public through money circulation schemes by making tall promises of high returns. Though this led to a cautionary notice from RBI, no penal action was taken against the company. MITL has also been suspended in the past for not complying with the listing agreement. No wonder, investors are so suspicious of the stock market and have little respect for the regulators.
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    Stock manipulation: Nu-Tech Corporate Services

    Nu-Tech Corporate Services has no source of business income, yet, its stock price has rallied 1208%

     

    Earlier known as IIT Capital Services, Nu-Tech Corporate Services (NTCS) was in the business of leasing and hire purchase of plant & machinery and office equipment. In 2004, the Reserve Bank of India cancelled the certificate of registration of NTCS and ordered it to repay all public deposits. Since then, NTCS has not ventured into any new business, but has been in the process of recovering its non-performing assets to pay-off the loans taken from Federal Bank and Central Bank of India. NTCS had an outstanding loan of Rs19.16 crore with accrued interest amount amounting to Rs31.57 crore as on 31 March  2014. The only source of income for NTCS is through dividend income and rent; this amounts to approximately Rs23 lakh a year. This has been the only income for the defunct company over the past four to five years. Yet, over the past 15 months, its stock price has been ramped up by 1208%. Market operators are unconcerned due to lax rules and ineffective surveillance system of the market regulator.
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