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Goenka, TBZ Shares Fall Due to Trading Probe

Jul 9, 2012 5:18 AM   By Dilipp S Nag
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RAPAPORT... Shares of Goenka Diamond & Jewels Ltd. and Tribhovandas Bhimji Zaveri Ltd. (TBZ) slumped ‎Monday after India Today magazine reported that former stock broker Ketan Parekh was manipulating the ‎stock prices of these and several other firms.‎

Shares in Goenka Diamond fell 20 percent to INR 161.75 per share on the Bombay Stock ‎Exchange (BSE) on Monday. The stock has risen more than six-fold since the start of 2012, hitting a 52-week high of INR 204.40 on July 6, 2012. TBZ’s stock fell 6 percent to INR 111.80 on the BSE. The Mumbai-based jeweler raised approximately $36 million (INR 2 billion) ‎through its initial public offering (IPO) in April.‎

A report by India Today magazine, citing an Intelligence Bureau report, ‎exposed a major stock market scam in which Parekh and his associates were driving up share ‎prices by creating false trading volume.

The scheme was to utilize illegal means to buy shares so that their prices would rise in the run-up to an IPO or a qualified institutional placement (QIP), despite the bearish ‎trend in the stock market. They would subsequently offload the shares after the offer leading ‎to a sharp fall in prices, India Today explained.‎

‎The brokers also targeted Dewan Housing Finance Corporation Ltd., Orchid ‎Chemicals and Pharmaceuticals Ltd., IVRCL Ltd., Pantaloon Retail (India) Ltd. and GMR ‎Infrastructure Ltd. Each of the named shares fell between 3 percent and 15 percent on the BSE ‎on Monday. The Sensex dropped 0.7 percent at 17,391.98.

TBZ issued a clarification to the BSE on Tuesday saying it is not aware of the IB report, and ‎neither has it received any letter or intimation from any regulatory authority in this regard. “We categorically deny any knowledge of these alleged manipulations, and believe these ‎news articles to be malafide and without substance," the company stated.
Tags: Broker, Dilipp S Nag, Goenka Diamond, IB, India, India Today, Intelligence Bureau, ipo, Ketan Parekh, Rapaport, Sebi, stock, TBZ
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