RAPAPORT... PC Jeweller has denied a report that its CEO has been
arrested, but scrutiny of the Indian retailer has intensified amid a slump in its
share price.
Business Television India (BTVI) reported Thursday that
India’s Central Bureau of Investigation had detained Balram Garg, the jeweler’s
CEO, as part of a probe into his dealings with politicians. It also alleged a
connection between Garg and Mehul Choksi, the managing director of Gitanjali
Gems, which is under investigation over bank fraud.
However, that report was incorrect, Sanjeev Bhatia, PC
Jeweller’s chief financial officer, said in a statement later Thursday. Garg
has already appeared on television for a live interview to clarify the
situation since the report emerged, Bhatia noted.
Bhatia also described the arrest claim as a “damaging rumor”
in a separate interview on BTVI.
Delhi-based PC Jeweller’s stock has plummeted 76% since the beginning
of the year, with a 62% drop since last Tuesday. Shares fell 9% in early
trading Thursday, but recovered following the company’s reassurances, ending
the day 10% higher than they started.
Possible reasons for the slump included reports of links to
Vakrangee, a service provider that the Securities and Exchange Board of India has
been investigating for alleged stock manipulation, according to Business Today.
In addition, PC Jewellers chairman Padam Chand Gupta has given away some of his
stock to family members, raising investors’ concerns that he would continue to
offload shares, the magazine added.
“We do not find any justification or reason behind [the]
decrease in [the] price of equity shares of the company today,” Bhatia added in
his statement. “We would like to assure our investors, shareholders and other
stakeholders that there is nothing wrong with the company and its operations,
the fundamentals of the company remain strong, and it continues to move ahead on
[a] growth path.”
Image: PC
Jeweller/Facebook
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