After the share markets, it is the bullion market
Ahmedabad: As the furore over the payment crisis in the stock markets is slowly dying, a new payment crisis has gripped the Ahmedabad. This time it is the default of a leading gold dealer, K Lal.

The dealer, who owes over Rs. 50 crore to various banks and gold merchants, has apparently declared bankruptcy and is absconding.

While the Reserve Bank of India has declined to comment, industry sources state that many state-owned banks, such as Bank of India, Punjab National Bank and SBI -- have extended loans to Lal in the past.

Bank of India’s exposure is estimated to be the highest at Rs 20 crore. Also affected is another gold merchant, Arvindbhai Choksi, who is reported to have made a payment just prior to the default and never received delivery.

Through aggressive undercutting, Lal has dominated the Ahmedabad bullion markets for over a year, and was selling gold biscuits at a price that was around Rs 600 lower than the bank selling price.
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Mutual funds increase communication with investors
Mumbai: With declining net asset values as a result of falling markets, the investors in mutual funds are less than a happy lot. Nearly 37 open-ended schemes are quoting below Rs. 7 and nearly 100 schemes are quoting below par. Investors in funds have suffered a substantial erosion in their wealth.

To assuage investor sentiments and reassure their unitholders that their money is being well managed, mutual funds have aggressively initiated distributor and investor meets. These meetings are all the more crucial if one considers the fact that even if the markets were to improve, the NAVs are unlikely to reach anywhere near the acquisition cost of the investors in the near future.

Among the funds who have already initiated such measures are Alliance Capital, DSP Merrill Lynch, IDBI Principal and Prudential ICICI.

The funds are requesting investors not to panic and instead focus on their investment objectives and their risk profile.
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Sebi initiates probe into price rigging of Amara Raja
Mumbai: The country’s capitla markets regulator, Securities and Exchange Board of India (Sebi), has launched a probe into suspected price manipulation in Amara Raja Batteries that has seen the share price go from Rs. 60 to Rs. 300.

Sebi has asked the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) to furnish the trading data of some of the brokers suspected to be involved in the scrip. According to reports, the price of the share has been propped up through circular trading.

Then the operators started offloading the stock by placing purchase orders through their associates. At least 15 brokers came to grief by this episode as the buyers vanished from the market without paying the money.

Investors, however, are blaming the stock exchange authorities of taking a very lenient view of the price movement in the share. Apparently the company’s management had informed the Bombay Stock Exchange as early as March 1, when trading volumes showed unusually high numbers.
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VST open offer may see offer price increase
Mumbai: Pursuant to the counter-offer made by ITC, the open offer made by the Damanis for acquiring 20 per cent additional stake in VST Industries is likely to be revised.

According to a report in a leading economic daily, the Damanis are planning to increase their initial offer of Rs. 112 per share by next Monday. The Damani camp has until tomorrow to withdraw from the race, if they choose to do so.ITC’s counter open offer is at Rs 115 per share. The Damanis reportedly hold 14.97 per cent of the paid-up equity capital of VST.

Indications are that the Damani camp might move MRTPC to stall ITC’s offer, as if ITC were to get control over VST, it would have close to 80 per cent share of the cigarettes market in India.
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