Deep Industries stock slumps to three year-low after contract from ONGC comes under CBI lens
BusinessToday.In June 4, 2018
The Deep Industries stock plunged in Monday trade after the firm said on Friday the Central Bureau of Investigation (CBI) registered a case against 13 officials of ONGC and Deep after complaint filed by ONGC's vigilance dept regarding contract with ONGC. The company in a filing to the BSE said, "This is the same matter of GDU Contract of ONGC, Rajahrnundry which is currently under dispute and writ petitions have been filed by us with Hon. High Court of judicature at Hyderabad."
The case was filed for alleged irregularities in a contract worth Rs 312 crore ($46.61 mn ) given to Deep Industries in 2014 for supplying gas dehydration units for ONGC's Rajahmundry plant in Andhra Pradesh.
Those named in the FIR in connection with the alleged scam in 2014 include former executive director D G Sanyal, then director (Onshore) Ashok Verma and ex-DGM (Production) Arup Ratan Das.
They have been accused of abusing their official position in giving a contract worth Rs 312 crore given to Deep Industries, an accused in the case, for supplying the gas dehyrdation units (GDUs), causing a loss of Rs 80 crore to ONGC, the Central Bureau of Investigation said.
The officials had awarded the contract to Deep Industries by overlooking the guidelines of the public sector undertaking and the fact that the company was ineligible due to technical deficiencies, the agency alleged.
In response, Deep Industries has filed writ petitions with the high court in Hyderabad.
The small cap stock closed at a fresh 52-week low of 107.15 level falling 19.98% in trade today.
The stock opened at 128 level today, a loss of 4.41%.
There were no buyers, only sellers for the stock after negative news hit the stock.
The stock has been falling for the last five days and has fallen nearly 30% during the same period.
The stock is down 47.86% since the beginning of this year. The stock has fallen 65.42% during the last one year.
Deep Industries is engaged in the business of oil and gas field services, and exploration and production. The company primarily provides support activities for petroleum and natural gas mining. The company provides high pressure air and gas compression and gas dehydration services on charter hire basis.
Meanwhile, the ONGC stock closed 1.71% lower at 170 level on BSE.