Jyoti CNC Automation shares tumble 16% today; here is why

Shares of Jyoti CNC Automation Ltd slumped sharply in Monday's trade, falling as much as 15.53 per cent to hit a day's low of Rs 692. The stock was last seen trading 14.23 per cent lower at Rs 702.60. At this level, it has declined 25.35 per cent over the past six months.

The sharp fall in the stock price came after the company disclosed an ongoing investigation involving its material subsidiary, Huron Graffenstaden SAS, by French authorities.

"Over this week, certain relevant authorities for our material subsidiary Huron Graffenstaden SAS had initiated investigation against Huron Graffenstaden SAS and certain of its employees where such employees had been interviewed by French authorities regarding export controls and export-documentation of machinery considered to be of dual-use," Jyoti CNC stated.

The company further outlined interim measures taken by authorities. "While we await any formal outcome of the investigation, we have been made aware about interim measures having been taken by the French authorities as under: 1. The director general of Huron Graffenstaden SAS has been temporarily restricted from discharging any duties pertaining to Huron Graffenstaden SAS; 2. Interim seizure of certain bank accounts of Huron Graffenstaden SAS totalling ~EUR 4.0 million and two residential properties owned by Jyoti SAS; 3. A formal judicial investigation has been initiated by French authorities against Huron Graffenstaden SAS and certain of its employees," it added.

The company also said, "Huron Graffenstaden SAS has received a notice regarding the actions, refutes the allegations made and is currently seeking better clarity from relevant authorities as well as legal advice in relation to the actions initiated and will contest it strongly. At this juncture, our Company believes that while the assets being seized and the services of certain employees who are part of the investigation may not be available to the Group for the time being, the current business and operations of Huron Graffenstaden SAS remain as usual."

"The aforementioned actions are not expected to have any adverse impact on business and operations of Jyoti CNC Automation Ltd, which on a standalone basis contributed over 85 per cent of revenue from operations for the Group," it further stated.

As per exchange data, promoters held a 62.55 per cent stake in the company.