Shares of JSW Steel today plunged over 8% in intra-day trade after Supreme Court ordered a CBI probe against former Karnataka Chief Minister BS Yeddyurappa for allegedly granting undue favours to firms, including of the Jindal group.
The shares fell 8.36% to a low of Rs 606.10 on the BSE, before recovering some of the losses. The stock finally ended the day 5.19% lower at Rs 627.05, even as the company said it was not party to any illegal activity and will cooperate in any probe.
Similar movements were seen on the National Stock Exchange, where the stock dived 8.41% after the court order. Later, it closed the day at Rs 627.15, down 5.16%.
"It has not done any illegal activity nor connected with any wrong doing. It has full faith in the judicial process and its books are open and it will fully co-operate with the investigating agencies," JSW said in a statement following the apex court order.
The JSW statement also quoted company's Joint Managing Director Seshagiri Rao saying that "the group follows highest standards of corporate governance. JSW Steel is in fact the victim of alleged illegal mining."
The Sajjan Jindal-led company, which runs a 10 million tonne per annum plant at Karnataka's Vijayanagar, is country's third largest steelmaker.
While directing CBI probe, the apex court also accepted the April 20 report of the Central Empowered Committee (CEC) which had pointed out several allegations against Yeddyurappa and corporate entities involving Jindals and Adanis.
In its report, the CEC had recommended CBI probe considering the "massive illegalities and illegal mining" found in Karnataka and allegations against the Jindal Group as being "recipient of large quantities of illegally mined material and undue favour being shown to them.
The CEC report said the Prerana Education Society "set up by the close relatives of the then chief minister, Karnataka" had during March, 2010 received donations of Rs 10 crore from South West Mining Limited, a Jindal Group company, despite its own profit for 2009-10 being only Rs 5.73 crore.