Company accuses market operator Sharad Shah of hammering infrastructure stocks
In a letter to the Intelligence Bureau (IB), Reliance Infrastructure has named a powerful market operator for the hammering of stock prices of infrastructure companies.
The letter, signed by the secretary of Reliance Infrastructure (R-Infra) Ramesh Shenoy and addressed to IB director Nehchal Sandhu, alleges that stock market operator Sharad Shah was leading the alleged bear cartel that had led to market capitalisation loss of more than Rs 300,000 crore.
"In less than 90 days, this illegal cartel has already destroyed market value of Rs 300,000 crore for the infrastructure sector, which is of the highest priority for the country," the letter states, a copy of which is with the Business Standard. "These bear operators, through market manipulation and rumour mongering, have distorted India's capital markets in general and the infrastructure sector in particular," it says.
The letter lists 23 companies — L&T, NTPC, Bhel, Reliance Power, Jaiprakash Associates, NHPC, JSW Energy, Adani Power, Tata Power, Mundra Port and SEZ, GMR Infrastructure, Jaiprakash Power Ventures, ABB, Torrent Power and R-Infra — that were allegedly affected.
"Market sources indicate that hammering of infrastructure stocks has been led by stock market operator Sharad Shah (also known as Sharad Bobada),” the letter dated February 10 alleges. "The cartel led by Bobada has constantly indulged in rumour mongering and manipulation of stocks of infrastructure companies for its personal enrichment and has accumulated crores of rupees in a short span," it adds.
Sharad Shah, when contacted, refused to comment.
Meanwhile, shares of R-Infra lost nearly six per cent today to close at Rs 605.60. The stock has almost halved in the last eight months when the benchmark Sensex gained nearly three per cent. The other stocks of the Anil Ambani group have also been witness to a significant downswing in the recent past.
Incidentally, the R-Infra letter comes close on the heels of a media statement released by a Reliance ADA Group spokesperson on February 9.
"A series of completely baseless and motivated rumors have been spread today by our unscrupulous corporate rivals... This has been accompanied by vicious and illegal bear hammering of our listed stocks, to create panic and destabilise the markets. We have made a formal complaint to the Securities and Exchange Board of India (Sebi) and the stock exchanges to investigate these illegal trades immediately and take appropriate action to safeguard the interests of our over 11 million investors," it said.
