Mumbai: Promoters of Gujarat Heavy Chemicals Ltd (GHCL) did not sell any shares in the market in the past six months, a company executive said on Thursday.
Promoter holdings in the chemical and textiles firm declined to 18.16% in March from 38.2% in December. Market regulator Securities and Exchange Board of India (Sebi) on Monday banned GHCL and its promoters from trading for allegedly submitting false information on the company’s shareholding pattern to the stock exchanges.
“The promoters did not sell any stake,” Nikhil Sen, head of international business and strategy at GHCL, said on Thursday in an interview, the first by a senior official after the Sebi ban.
“I think the question here, as I mentioned, is (that) it will be wrong of me to discuss it, as the matter is sub judice and it is under legal consideration. When we bring about the answer to Sebi, we will very clearly state the reason,” he said.
The issue arose when GHCL promoters entered badla, or carry-forward, transactions with financiers and brokers, according to people familiar with the situation who didn’t want to be named.
The brokers were to buy GHCL shares from the market so the promoters could increase their stake,,these people said
The promoters were later unable to pay the agreed-upon margin money to the brokers and financiers, who on their part did not transfer the shares to the promoters as the stock price had fallen sharply, the people said.
Most of these brokers had entered badla financing at a time when the shares were at a price of around Rs80 to Rs100 each. Since the stock has declined to around Rs30 each, these brokers were looking for a settlement with the promoters, the people said.
The Sebi order said the disclosures on promoter holdings made by the firm across the four quarters in 2008 in its three-monthly filings to the stock exchange are at “significant variance” with actual holdings. The market watchdog directed GHCL to “reconcile and file the correct shareholding” with the exchanges.