Finmin seeks details of LIC's investment in Gitanjali Gems

The Finance Ministry has sought details from Life Insurance Corporation (LIC) pertaining to its investment in Gitanjali Gems.

The Department of Financial Services has asked for details of investment in Gitanjali to ascertain if the investment had any "malafide intention", sources said.

Details have been sought after complaint received on the sharp fall in the stock price of Gitanjali Gems.

LIC, the biggest domestic institutional investor in the stock market, held 4.36% stake in Gitanjali Gems during the January-March quarter, which rose to 4.89% as of June 30.

In the quarter ended September 30, 2012, LIC held just 1.95% stake in the company.

Shares of the branded jewellery firm have been on a downward spiral since the third week of June. From a peak of Rs 631 on April 22, the stock is now down to Rs 63 per unit.

Shares of the company closed at Rs 62.70 per unit, down 4.93% on the BSE.

On a one-year basis, the share price of Gitanjali Gems has seen a decline of more than 80%. According to data from the BSE, shares of Gitanjali Gems were hovering around Rs 323 during first week of August last year.

Market regulator Sebi and the bourses, last month, had suspended trading activities of 26 entities, including Gitanjali Gems promoter Mehul Choksi and firms linked to Prime Broking, as part of a probe into suspected market manipulations while dealing in Gitanjali Gems shares.

They had decided to suspend 'unique client codes' of the 26 entities from trading for a period of six months, or till the conclusion of the probe, whichever is earlier.