Disclosures on shareholding were inflated.
The Securities and Exchange Board of India (Sebi) has barred GHCL promoter Sanjay Dalmia, 46 promoter investment companies, Managing Director Ravi Shanker Jalan and Company Secretary Bhuwneshwar Mishra from trading in the stock market after investigations revealed that the company had filed false shareholding details.
In an interim order, Sebi wholetime director K M Abraham stated that the company’s disclosures on promoter holdings for four quarters in 2008 are at significant variance with the actual holdings. In the last three quarters ending June, September and December 2008, the disclosure of promoter holdings was inflated over 100 per cent.
The Rs 3,200 crore (2007-08 consolidated numbers) GHCL is a major producer of soda-ash and also makes textiles. The shareholding discrepancies came to light following mandatory disclosures on pledged shares that companies have to make following the accounting fraud in Satyam Computers earlier this year. According to disclosures on February 16, GHCL's promoters have pledged 2.39 million shares.
Asked about the discrepancy, a GHCL spokesperson said, “We are studying the Sebi order and will reply to Sebi. We cannot comment as the matter is sub-judice.”
Among other things, Sebi discovered that GHCL had disclosed that promoters held 10,200,110 shares or 10 per cent of the company’s equity through Carissa Holdings for the quarter ended December 2008, which was approximately six times the actual holdings. By February 16, 2009, the company said Carissa Holdings’ shareholding was 16,06,752 shares or 1.6 per cent of GHCL’s equity.
| GAP ANALYSIS | ||
| Quarter ended | As disclosed by company* | Actual holding of promoters* |
| 31 Mar ‘08 | 47.06 | 32.42 |
| 30 June ‘08 | 40.42 | 19.41 |
| 30 Sep ‘08 | 40.3 | 18.02 |
| 31 Dec ‘08 | 38.32 | 18.74 |
| * As % of paid-up capital Source: Sebi order | ||
The last disclosures for the quarter ended March 2009, shows the promoters holding at 18.16 per cent against the actual holding of 18.74 per cent. “This shows that the promoters have tried to reconcile their wrong holding reported by them in the last four quarters by giving the supposedly correct holding for the March 2009 quarter,” the order stated.
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On April 25, 2007, the market regulator had passed an interim order barring six promoter entities of GHCL from buying, selling or dealing in the scrip. The order was discontinued on August 21, 2007.
However, Sebi initiated adjudication proceedings against Carissa Investment Corporation Limited.
Sebi has directed GHCL to reconcile and file correct shareholding details with the exchanges.