PNB scam after effect: Gitanjali Gems shares dive 10%; company CFO resigns citing wife’s health

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Published: February 19, 2018 1:01:22 PM

The after effects of India's biggest fraud in the banking systems of Punjab National Bank have been increasing day after day. Today, shares of Gitanjali Gems fell for the third straight day diving as much as 10%. On the other hand, Gitanjali Gems CFO and one board member have resigned from the company.

Shares of Gitanjali Gems sank for the third straight session sinking as much as 10% to the Rs 33.8 on Monday on BSE. (Image: Reuters)

The after effects of India’s biggest fraud in the banking systems of Punjab National Bank have been increasing day after day as the implications of Rs 11,400 crore scam are unfolding in the ongoing investigation. In the matter of unauthorised LOUs being raised from PNB to get buyer’s credit from several Indian lenders, the government’s investigative agencies are not able to locate the alleged diamond merchant Nirav Modi. The other major company which has been under investigation is Gitanjali Gems. Shares of Gitanjali Gems sank for the third straight session sinking as much as 10% to the Rs 33.8 on Monday on BSE.

In a major blow today, Gitanjali Gems said that CFO and one board member has resigned from the company. The CFO of Gitanjali Gems, Chandrakant Karkare resigned from the company while Krishnan Sangameswaran has resigned from the board of the company.

“I am very grateful to you for assigning me the responsibility of CFO in the company and I have executed my responsibilities in a professional way. Sir, recently my wife has undergone a major surgery called Hemicolectomy at Lilavati Hospital. The post operation recovery is not up to the expected level. This has resulted in restriction on my carrying responsibilties as CFO and will be very difficult for me in future. Sir, taking the above factor in consideration, I would like to request you to relinquish me from responsibilities of CFO of the company. Kindly accept my resignations from the post of CFO with immediate effect,” Gitanjali Gems said in an exchange filing quoting Chandrakant Karkare mail.

“The Exchange has received email dated February 19, 2018 from Mr Krishnan Sangameswaran with regards to his resignation from the board of the Company,” Gitanjali Gems said in another regulatory filing today.

According to a PTI report, four big jewellers — Gitanjali Gems, Nakshatra, Ginni and Nirav Modi — are under scanner. The Central Bureau of Investigation and Enforcement Directorate are looking at their arrangements with various banks and the end use of money. Shares of Gitanjali Gems are on a declining trend for the last three days. The stock of Gitanjali Gems had nosedived about 42% in the period of last four trading sessions. Shares of Gitanjali Gems are locked in the lower circuit since today morning for the third day. Earlier on Thursday and Friday last week, shares of Gitanjali Gems lost 20% each on both the days.

Following a steep shrink in the share prices of Gitanjali Gems, the market capitalisation of the company had been adversely affected. Gitanjali Gems had shed around Rs 294 crore from the market capitalisation. As per today’s price of Rs 33.8, Gitanjali Gems commands a market capitalisation of Rs 400.92 crore on BSE.

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