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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.
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Tags:
Broker, Dilipp S Nag, Goenka Diamond, IB, India, India Today, Intelligence Bureau, ipo, Ketan Parekh, Rapaport, Sebi, stock, TBZ
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