Once bitten twice shy. This saying might just well apply to Sun Pharmaceutical Industries shares that were beaten black and blue in today’s session.
The country’s leading drug maker has lost more than Rs 13,000 crore worth of investor wealth in Friday’s trading session,
with the stock plunging over 12 percent to a 6-year low of Rs 370.
Investor's wealth took a severe hit following a whistleblower complaint alleging that pharmaceutical manufacturer Aditya Medisales Ltd had transactions with Suraksha Realty, controlled by Sun Pharma’s co-promoter, Sudhir Valia.
Mirroring the concerns, shares of the country’s largest drugmaker by market value recorded their biggest intra-day percentage drop since May 29, 2017.
But this isn’t the first time that Sun Pharma faced the wrath of investors.
A whistleblower had approached Sebi late last year with a document alleging various irregularities by Sun Pharma, its promoter Dilip Shanghvi and others.
Here are some of the companies whose shares took a hit either due to concerns with top management leading to wealth destruction for investors:
Sun Pharma – Promoter Dilip Shanghvi & co-promoter Sudhir Valia
In December, a whistleblower letter and a brokerage sales note cast several doubts about disclosure and corporate governance standards at
Among those is the relationship between its Promoter and Managing Director Dilip Shanghvi and one of the company’s key distributors – Aditya Medisales Ltd. The transactions took place between 2014 and 2017, and were worth over Rs 5,800 crore.
Yes Bank – Founder Rana Kapoor
The Reserve Bank of India trimmed Rana Kapoor’s term at Yes Bank to January 31, 2019 despite the board approving it for another three years from September 1, 2018. The reasons behind
RBI’s decision is still unclear but the news sent stock price plummeting to as low as Rs 147 per share from Rs 320 earlier.
Post the RBI’s decision, Kapoor has been in truce talks with Madhu Kapur and family while the RBI is yet to approve the candidate from the list of prospective CEOs shared by the board of Yes Bank.
Jet Airways – Founder & Promoter Naresh Goyal
Jet Airways saga began in August after unpaid employees approached the government seeking help, indicating the level the crisis about to unfold at Jet. Adding to the worries was escalating crude oil prices, which added pressure on the stock price.
The Ministry of Corporate Affairs sought details from Jet Airways and then dissatisfied employees sought clarification on financials of the company. When the company tried reaching out to potential investors for funds, one of the key recommendations was to ask
Goyal to cede control of the struggling airline. Stock price plummeted to as low as Rs 163 on October 1 from Rs 330 in August. IL&FS – Ramesh C Bawa (MD & CEO, quit in September 2018)
The biggest crisis since Satyam,
IL&FS, came to light in September when mutual funds started worrying about their investments in the company. This led to one of the mutual funds redeeming its papers at a very aggressive rate which eventually led to huge liquidity crisis in the entire system.
The brunt sudden redemption by mutual funds & other institutions was borne by NBFCs, especially housing finance companies, which saw wealth erosion anywhere between 40 percent-60 percent during the time of liquidity crisis.
Stock price of the listed entities of IL&FS group i.e. IL&FS investment managers dropped to Rs 6.6 as of today from Rs 12 in September, IL&FS Engineering & Construction declined to Rs 9.6 in December from Rs 16.6 in September while IL&FS Transportation Networks has lost more than two-third of its value and now trades at Rs 10.4.
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