Sadbhav Engineering surged 18.04% to Rs 132.50 at 14:59 IST on BSE after the company clarified that allegations by a minority shareholder of one of its unit, Bijapur Hungud Tollway, before the Company Law Board are completely frivolous.
The company issued the clarification during trading hours today, 17 April 2014.
Meanwhile, the BSE Sensex was up 316.77 points, or 1.42%, to 22,594.
On BSE, so far 96,000 shares were traded in the counter, compared with an average volume of 34,375 shares in the past one quarter.
The stock hit a high of Rs 133.30 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 110.50 so far during the day. The stock hit a 52-week low of Rs 52 on 16 September 2013.
The stock had outperformed the market over the past one month till 15 April 2014, rising 25.63% compared with the Sensex's 3.10% rise. The scrip had also outperformed the market in past one quarter, rising 30.60% as against Sensex's 5.62% rise.
The small-cap company has an equity capital of Rs 15.17 crore. Face value per share is Re 1.
On 6 March 2014, Sadbhav Engineering issued a clarification with regard to a media news that the Company Law Board (CLB) has passed an interim order for conducting forensic audit of the accounts of Bijapur Hungud Tollway, a subsidiary of Sadbhav Engineering and it has also been alleged that not only toll revenue has been shown less by the company but Sadbhav Engineering has siphoned off Rs 200 crore from Bijapur Hungud Tollway. Sadbhav Engineering said that the above allegations are incorrect, baseless and defamatory.
While a minority shareholder of Bijapur Hungund Tollway had made allegations of diversion of funds before the CLB, the High Court of Gujarat has by its order of 21 February 2014 directed the CLB not to proceed further in the matter. Thus, all proceedings before the CLB have been stayed including the interim reliefs that were granted by the CLB's order, the company said.
Thereafter, though the minority shareholder sought a clarification of and even appealed against the Stay Order before the Division Bench of the Gujarat High Court, the Stay Order has not been set aside. While the High Court modified its order only to the limited extent of permitting the minority shareholder to approach the CLB to attempt to enforce the interim reliefs granted, at the same time it also permitted the company to challenge the maintainability of any such proceeding, the company added.
The minority shareholder has filed an application before the CLB seeking enforcement of the CLB's orders on the ground that there has been wilful disregard/disobedience of the same by Sadbhav Engineering and its associates/affiliates.
The company said that the minority shareholder's allegations of purported disobedience of the CLB's Order are completely frivolous and devoid of merit. The company said it maintains that pursuant to the Stay Order all proceedings before the CLB were stayed including the interim reliefs that had been granted to the minority shareholder. Despite this, the firm said it has complied with the CLB's Order and permitted the minority shareholder to carry out inspection of the project site/toll plaza on 19-20 February 2014. The company said it was also willing to permit the minority shareholder to inspect the statutory records of the company on 26 February 2014 in exercise of its rights as a shareholder, after the Stay Order was passed, albeit without the involvement of any third parties. In fact, despite our willingness to provide inspection, it was the minority shareholder who did not turn up for inspection at the appointed date and time. Moreover, the company has provided an undertaking to the High Court that all agreements that are proposed to be executed by the company will be subject to the prior approval of the High Court. The company said that it is apparent from its conduct as stated above, that it has not, nor does it intend to, disobey any orders passed by the CLB.
Having said that, in view of the CLB's Order dated 10 April 2014 passed in the minority shareholder's application, the firm will once again voluntarily grant the minority shareholder inspection in accordance with the directions of the CLB. In the meantime, the company is also attempting to amicably resolve our disputes and the matters have been referred to the Mediation Centre attached to the Gujarat High Court for the same, the company said.
Sadbhav Engineering's net profit galloped 595.4% to Rs 25.94 crore on 75.7% growth in net sales to Rs 620.79 crore in Q3 December 2013 over Q3 December 2012.
Sadbhav Engineering is a construction firm with focus on road, irrigation and mining projects.
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