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REI Agro drops as Credit Suisse reportedly sues over fraud

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Capital Market
Last Updated : Jan 20 2015 | 1:00 PM IST

REI Agro was locked at 5% lower circuit at Rs 1.28 at 12:03 IST on BSE after Credit Suisse reportedly sued the company in Singapore claiming the basmati rice and 16 related companies conspired to get loans for non-existent trades of the staple.

Meanwhile, the S&P BSE Sensex was up 175.94 points or 0.62% at 28,437.95

On BSE, so far 19.17 lakh shares were traded in the counter with pending sell orders of 13.89 lakh shares at lower circuit. The stock has an average daily volume of 18.59 lakh shares in the past one quarter.

The stock hit a high of Rs 1.39 and a low of Rs 1.28 so far during the day. The stock hit a 52-week low of Rs 1 on 29 December 2014. The stock hit a 52-week high of Rs 7.50 on 22 January 2014.

The stock had outperformed the market over the past one month till 19 January 2015, rising 6.35% compared with 3.25% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, sliding 46.18% as against Sensex's 8.25% rise.

The small-cap company has an equity capital of Rs 95.80 crore. Face value per share is Re 1.

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REI Agro founders Sandip and Sanjay Jhunjhunwala used a web of sham rice-trading companies in Singapore and Hong Kong to support a 2012 $115.5 million loan agreement by REI Agro's Dubai-based Ammalay Commoditiess JLT, a lawsuit in the Singapore High Court reportedly indicated.

Reports indicated that Credit Suisse, leading a group of lenders who are seeking at least $80 million in damages, said in the October 2014 suit that the loan agreement was breached when Ammalay failed to provide audited accounts and defaulted on a $20 million payment. Sanjay Jhunjhunwala said in November 2014 court filings that trades by his two companies being sued were genuine and denied involvement in any fraud. The next hearing is scheduled for 26 January 2015, reports indicated.

REI Agro reported a net loss of Rs 999.15 crore in Q2 September 2014 as against net profit of Rs 5.39 crore in Q2 September 2013. Net sales declined 64.2% to Rs 519.19 crore in Q2 September 2014 over Q2 September 2013.

REI Agro is engaged in processing and marketing of basmati rice.

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First Published: Jan 20 2015 | 12:08 PM IST

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