Shares of Valecha Engineering were down 7.5% at Rs 44.50, extending its 10% decline in the previous session, after capital market regulator SEBI imposed a ban on the company, its promoters and certain entities from raising capital from the public and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, in any manner, for a period upto 3 years after it discovered irregularities in the preferential allotment of convertible warrants in October 2015.
In 2005, the company has alloted 1.4 million warrants convertible into equity shares at a later date on a preferential basis to promoters and certain entities. The allottees did not make the full payment and the warrants were allotted by the company without receiving the consideration.
The regulator in its order dated January 05, 2015 also said that the shares of Valecha Engineering allotted during the preferential allotment dated October 19, 2005 and lying in the demat account of the preferential allottees shall remain frozen.
The stock opened at Rs 45 and touched a low of Rs 44. At 12:45pm, over 250,000 shares were traded on both the stock exchanges.
