GTL fiasco: 6 questions Sebi should be asking now

Moneycontrol Bureau

GTL shares were up 11% at Rs 142.10 in the first hour of trade on Tuesday, and GTL Infra was up 4% to Rs 17.65.

The company's promoter-cum-chairman managing director Manoj Tirodkar denies the steep fall in the stock had anything to do with the sale of pledged shares.

'Some fall still pending' to GTL's tumble, says Udayan

The bulk deal data on the stock exchanges shows that seven private holding companiesGreen Ridge Properties, Cosmo Advisory Services, Reckon Trading, Aerolite Advisory Services, Cross Link Trading, Plasma Advisory Services and Savyasachin Estatessold 51.60 lakh shares between them. This is roughly 40% of the total delivery volume of 1.28 crore shares on Monday.

Here are a few questions that Sebi should be asking (if it is not already looking into the matter)

1. Who are the owners of these privately held companies?
2. Were they acting as fronts for somebody else?
3. Are they connected with the promoters in any way?
4. What prompted the distress sale that wiped out 62% of investor wealth in a single trading session?
5. Was the fall due to a stock price ramping operation gone awry?
6. Did the sellers have any definite information that is (still) not available in the public domain?

Interestingly, none of the sellers hold 1% or more in the company. That way, their names would never show up in the shareholding details reported to the stock exchange.

The pullback on Tuesday notwithstanding, GTL is still available at a market capitalization less than half its annual revenues. And there are still no bargain hunters forthcoming. That says a lot about the investor perception about the company which was trying hard to shrug off its fallen angel image acquired post the stock market crash of 2001.

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