Andhra Bank fraud kills this small-cap stock; BSE to suspend trading next month

By: |
March 30, 2018 5:29 PM

Shares of the Gujarat-based pharmaceutical firm Sterling Biotech Pvt Ltd allegedly involved in defrauding the Hyderabad-based state-owned Andhra Bank are set to be suspended from BSE from trading next month on the account of non-compliance with SEBI since last two straight quarters.

Shares of Sterling Biotech Ltd have been continuously plummeting since the beginning of March 2018. (Image: PTI)

Shares of the Gujarat-based pharmaceutical firm Sterling Biotech Ltd allegedly involved in defrauding the Hyderabad-based state-owned Andhra Bank are set to be suspended from BSE from trading next month on the account of non-compliance with SEBI since last two straight quarters. Sterling Biotech Ltd is one of the eight companies in which trading will be suspended with effect from next month. “Trading in securities of the undermentioned companies will be suspended w.e.f. April 18, 2018 (being 21 days from issue of this notice); on account of non-compliance with Regulation 55A of the SEBI (Depositories and Participants) Regulations, 1996 for two consecutive quarters i.e., September 2017 and December 2017,” BSE said in a notice.

Other six companies which are also included in the suspension list are Central Provinces Railways Company LtdDhanleela Investments & Trading Company LtdMatra Realty Ltd, Professional Diamonds LtdTentiwala Metal Products Ltd, Trilogic Digital Media Ltd.

The pharma firm Sterling Biotech Ltd was initially accused of cheating Andhra Bank to the tune of Rs 5,000 crore. To 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.”

Shares of Sterling Biotech Ltd have been continuously plummeting since the beginning of March 2018. The stock of Sterling Biotech has tumbled 46.15% to an all-time low of Rs 1.75 in the span of 19 trading session on NSE. Shares of Sterling Biotech are presently categorised in the Z group of BSE.

According to BSE’s notice, the entire promoter shareholding will be frozen effective immediately from 27 March 2018, till further notice. “In case, any of the aforesaid companies comply (to the satisfaction of the Exchange) with the provisions of the Regulation 55A of the SEBI (Depositories and Participants) Regulations, 1996 on or before April 12, 2018; trading in securities of the said companies will not be suspended, BSE added. 

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