Edelweiss Financial Services share falls 5% for second session after MCA orders inspection of subsidiary's books
BusinessToday.In March 19, 2021
Edelweiss Financial Services share tumbled 5% for the second consecutive session in early trade amid reports that the corporate affairs ministry has ordered an inspection of books of its group firm Edelweiss ARC after allegations of misuse of funds by a whistleblower. However, Edelweiss Asset Reconstruction Company has denied intimation of any such probe by the ministry and said business and operations have been conducted in a fair and transparent manner.
The share fell 4.99% to Rs 76.15 against previous close of Rs 80.15 on BSE. Edelweiss Financial stock trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
The share has gained 91.73% in one year and risen 18.31% since the beginning of this year.
In a month, the stock has climbed 28%.
In afternoon session, the stock pared all losses to trade 1.37% higher at Rs 81.30 on BSE. Market cap of the firm stood at Rs 7,640 crore.
On Thursday, the stock dropped 4.98 per cent to close at Rs 80.20-its lower circuit limit-on the BSE.
On the NSE, the fell 4.97 per cent to close at Rs 80.15. On Thursday, BSE had sought a clarification from the company with reference to news that the Ministry of Corporate Affairs (MCA) has ordered an inspection of books of Edelweiss Asset Reconstruction Company (EARC).
"We would like to clarify that Edelweiss Asset Reconstruction Company Ltd (EARC) has not received any intimation of any inspection being conducted by the MCA," the company said, adding that EARC is in full compliance with the applicable laws, and has been conducting its business and operations in a fair and transparent manner.
As per reports, the whistleblower - Paras Kuhad, a former additional solicitor general of India - had written to the Prime Minister's Office (PMO) and the Reserve Bank of India (RBI) that Edelweiss Group along with its partner Canadian pension fund Caisse de depot et placement du Quebec (CDPQ), diverted at least Rs 1,800 crore from EARC. Kuhad and his family hold about 14 percent stake in Edelweiss Asset Reconstruction Company.