Simbhaoli Sugars shares slump 16% on loan default case

In a late night filing to stock exchanges, the company said it had taken finance from banks, for which it has been regular in repayments but for periodical adverse cycles in sugar industry.

The Central Bureau of Investigation (CBI)has registered a case against Uttar Pradesh-based Simbhaoli Sugars on charges of causing a loss of about Rs 110 crore to staterun Oriental Bank of Commerce.

The investigating agency booked Chief Executive Officer G S C Rao, CFO Sanjay Tapriya, Executive Director Gursimran Kaur Mann and five non-executive directors.

Gurpal Singh is son-in-law of Punjab Chief Minister Captain Amarinder Singh.

In any case, the corporate credit, as well, transformed into an NPA on November 29, 2016, subsequently bringing about its first exceptional advance of Rs 97.85 crore (as affirmed extortion) and the corporate advance of Rs 109.08 crore (as crisp extraordinary).

The bank has alleged that Simbhaoli Sugar "dishonestly and fraudulently diverted" a Rs 148 crore loan sanctioned in 2011 for financing cane farmers for private use.

CBI in its FIR has alleged that the bank in January 2015 issued another corporate loan of Rs. 110 crore to the company to repay the previous loan of Rs. 98 crore.

After Nirav Modi, Gitanjali Gems and Rotomac, it's now Simbhaoli Sugars Limited which is in the news for all the wrong reasons. The reply from the company is awaited.

Meanwhile, investors have already started to remove their money from Simbhaoli, as the company's share price tumbled by almost 20% by touching 52-week low of Rs 13.50 per piece since the beginning of trading sesssion on Monday. On the complaint of OBC in connection with fraud, this is the second FIR registered by CBI in last three days.

At NSE, shares of the company plummeted 19.94 percent to touch its one-year low of Rs 13.45. However, at around 1352 hours, the share price was trading at Rs 95.05 per piece down by Rs 10.70 or 10.12%.

Recently, OBC-one of the banks in its consortium-filed a fraud monitoring report against the company and referred it to investigation agencies, it added.

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