Adding another example to the list.
Eco Hotels and Resorts Ltd
Acquired by Suchit Punnose (Redribbon …).
Previously manipulated Modulex Construction Technologies Ltd using the same model.
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Dear Sir, Could you please elaborate on the fraud in Wardwizard food. Thanks.
Wardwizard food have some fast food and beverage related business. If they had listed their business via an IPO route, there would be some scrutiny and appropriate valuation would be provided. But they listed via indirect listing by acquiring a company and manipulating it’s stock price to absurd level, investors buying at high levels will be stuck till the fundamentals improve to that level.
They may be under reporting profits as Income tax department raised their group office few months back. Although no qualified opinion was made in the limited review by the auditor.
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Thank you that was insightful. Also wanted to understand why a company will under report profit? Saw some political big shots at the opening ceremony of Wardwizard innovations which has exactly same promoters as that of the food company.
To save tax.
They had manipulated it’s stock also price after buying a company named Manvijay Development Company. They have started dumping it recently.
Thank you. Came across a similar case Time medical company taking over a laboratory chemical company viz; Fischer Chemicals. Something unusual happening a Singapore based MRI machine manufacturing company entering Indian markets through a Listed company Fischer Chem that sell laboratory chemicals and totally unrelated to MRI industry. This reverse merger story is intriguing. Please share your thoughts. Thanks
When they will integrate their business with the listed company, sales and profit will jump in quarterly results. Market cap to annualized profit will give the pe. If it is reasonable then consider otherwise avoid these manipulated stocks.
Note: the business of the acquired company is not important and can be unrelated. The business of the acquirer will drive the valuation.
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Letter of Offer fischer.pdf (779.1 KB)
similar reverse integration
Fischer Chem.pdf (980.9 KB)
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Circular trade between add shop e retailer and white organics agro.
The primary criterion for investment is small company, in my opinion, is to examine the promoter’s stake. Avoid investing if the promoter is significantly reducing their stake, even if the company’s fundamentals appear strong and promising.
ASER - 27% from 63%
Surprisingly stock is still trading at 50 cr valuation. Indian retail needs lots of education…
Credit / reference: Twit from Dr Vijay Malik
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"From the above transactions, it seems that promoters and CEO are doing exactly the opposite of what [minority investors are doing at the moment. Public shareholders are continuously putting in more money in the shares of the company, the promoters are continuously selling their stake in the company and taking money out of the company.
Interesting reading…
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Company is out of business but has given 10x returns in the last 3 years. Reporting revenue and profit growth as well.
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All the action is due to performance of the wholly owned subsidiary i.e., TAAL Tech India Private Limited
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ICICI Securities Delisting Controversy: A Deep Dive for Investors
As the legal battle surrounding the ICICI Securities delisting intensifies, minority shareholders are raising several concerns that are shaping up to be pivotal in the realm of corporate governance and minority shareholder rights in India. The appeal filed by Manu Rishi Guptha with the National Company Law Appellate Tribunal (NCLAT) brings to light critical flaws in the delisting process approved by the National Company Law Tribunal (NCLT) on August 21, 2024. This development, alongside ongoing proceedings in the Bombay High Court, has created a multi-forum legal contest, the outcome of which could set key precedents for delisting processes in Indian capital markets.
Key Points for Investors:
- Natural Justice and Transparency Issues One of the fundamental grounds of the appeal is the violation of natural justice principles. Guptha argues that the NCLT’s decision lacked transparency, with key documents, such as SEBI’s exemption letter from June 2023, not being made available for scrutiny. For investors, this raises significant concerns about the fairness of regulatory decisions and the adequacy of checks and balances in the process.
- Misapplication of SEBI Regulations A central argument against the delisting is the alleged misapplication of SEBI’s Regulation 37, which simplifies the delisting process for companies in the same line of business. The appeal claims that ICICI Bank and ICICI Securities, operating in banking and financial services respectively, do not meet this criterion. For investors, this calls into question the integrity of the delisting framework and its implications for shareholder protection.
- Electoral Malpractices and Data Privacy The appeal outlines potential electoral malpractices, where ICICI Securities allegedly shared confidential shareholder information with ICICI Bank to sway votes in favor of the delisting. This violation of privacy norms should be alarming to institutional and retail investors alike, as it could set a dangerous precedent for corporate governance.
- Valuation Concerns One of the most significant points for shareholders is the allegation that the swap ratio undervalued ICICI Securities shares by over 40%. While the approved delisting valued the shares at Rs 626, Guptha argues that the real value should be closer to Rs 1,594 based on peer comparisons. This underlines a critical issue—whether the delisting process allows for fair price discovery or if it risks eroding shareholder value, especially for retail investors.
- Minority Shareholder Disenfranchisement The appeal highlights that while institutional shareholders supported the delisting, non-institutional investors largely opposed it. For those in the market, this raises red flags about the balance of power between large institutional investors and minority shareholders in corporate decisions.
- Broader Corporate Governance Implications With procedural irregularities and regulatory concerns raised, the appeal criticizes the NCLT for failing to seek input from regulatory bodies like SEBI and the stock exchanges (NSE, BSE). This lack of regulatory engagement could undermine trust in the fairness of corporate actions, which is crucial for investor confidence in India’s capital markets.
Investment Implications
The ICICI Securities delisting saga offers several lessons for investors, particularly those concerned with minority shareholder rights and corporate governance. The undervaluation claims, electoral malpractices, and lack of transparency all suggest that delisting processes, if not carefully scrutinized, can result in significant losses for non-institutional investors. The appeal underscores the need for regulatory bodies to maintain robust oversight of such actions to protect public shareholders.
Moreover, the complexity and scale of this case, which now spans the NCLT, NCLAT, and Bombay High Court, signal the potential for long-term uncertainty surrounding ICICI Securities’ shares. Investors holding positions in companies facing similar delisting processes should be vigilant, particularly regarding the fairness of share valuations and the role of institutional versus non-institutional shareholders in approving such actions.
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The promoter of a company called Nutricircle is being allotted more than 55 lakh shares at issue price of Rs 10 whereas the CMP of the share is Rs 225. As per the price chart on Screener, the share price was never as low as Rs 10 after 2016.
So, the allocation is less than 1/20th of the market price! How is this allowed?
The company claims this is approved in-principle by BSE!
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Company name: Pressure Sensitive Systems (India) Ltd
Currently trades at around 1 PE and has 100% public shareholding. Market cap is around 76 cr.
Balance sheet on Screener shows that cash and cash equivalents of around Rs 133 crore disappeared between March and Sept 2024 quarter results.
Where is this huge amount gone? I would be very interested to know if you can figure this out.
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Par Drugs. Short-changing investors by slump sale of the main business at BV to allegedly related party and proposing to get into completely unrelated business.
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CG issues in MapMy India
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SEBI action on Mishtann Foods
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Sebi halts trading in Bharat Global Developers over suspected stock price manipulation
This is a multi-year story of stock price manipulation, assisted by fake order books. Seems those involved have political connections—so likely this is not going to be pursued with vigor.
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