Uttam Galva under MCA lens for alleged share price manipulation
Press Trust of India / New Delhi Jan 05, 2010, 18:58 IST
For the second time in last one year, the government is likely to inspect financial books of Uttam Galva Steels for alleged manipulation of share prices, funds diversions and some other related matters.
The Ministry of Corporate Affairs is likely to issue an inspection order soon, senior government officials told PTI.
When contacted, the company, in which global steel major Arcelor Mittal recently picked up 5.6 per cent stake, declined to comment.
The company is facing allegations of manipulating share prices by way of placing shares in benami and front companies, granting contracts to brokers to play with the stocks to jack up prices.
It is alleged that the company formed a cartel of brokers, which in league with promoters bought five million shares from the market at Rs 40 a share and the same were bought back at much higher rate of Rs 62.
The company is also facing allegations of diverting funds in the guise of brokerage and commission, writing off of sundry balances of some parties, non-accounting of goods withdrawn for captive use in the cost of raw material and some other related violations.
The Registrar of Companies, which comes under the purview of the MCA, may be asked to scrutinise the account books of Uttam Galva under Section 209 of the Companies Act, 1956, sources said.
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