Indian stock markets just took a sigh of relief in the second week of February 2018 after witnessing massive rout on the back of global sell-off and jitters over the tax on LTCG but the advent of India's biggest bank fraud at PNB again hammered it down.
Indian stock markets just took a sigh of relief in the second week of February 2018 after witnessing massive rout on the back of global sell-off and jitters over the tax on LTCG but the advent of India’s biggest banking fraud at country’s second-largest PSU lender Punjab National Bank again hammered it down. Just after a month when PNB scam unravelled, few other banking sandals also came to light and one was associated with the Hyderabad-based state-owned lender Andhra Bank. In India’s biggest banking scam, the billionaire diamantaire Nirav Modi and his uncle Mehul Choksi were accused of defrauding an amount of Rs 11,400 crore, which later got escalated to Rs 13,600 crore.
In Andhra Bank scandal, a Gujarat-based pharmaceutical firm Sterling Biotech allegedly cheated the bank for an amount worth Rs 5,000 crore. Following which Andhra Bank clarified that “We are the lead bank of the consortium in case of two group companies of Sterling Group and the Bank’s exposure to these companies is Rs 578.57 crore (fund based) and Rs 568.35 crore (non-fund based) as on date and not Rs 5000 crore as reported in the news publications.”
Out of these two banking frauds, the stocks of two companies which were allegedly involved in the malpractice have collapsed in the since the respective firms were defamed in banking scandals. One is the Mumbai-based Mehul Choksi led jeweller Gitanjali Gems Ltd and the second company is Gujarat-based pharma firm Sterling Biotech Pvt Ltd.
The stocks of these two companies have seen an abnormal plunge in the share prices in the last one-and-half-month. Shares of Gitanjali Gems have fallen more than 86% in last 29 sessions while the shares of Sterling Biotech have plummeted nearly 37% in the last 12 trading sessions. The stock of Gitanjali Gems has lost 86.16% to Rs 8.7 from a share price level of Rs 62.85 as on 12 February 2018 while the stock of Sterling Biotech has tanked 36.84% to Rs 1.8 from a share price level of Rs 2.85 as on 9 March 2018.