May 31 2020
After stock crash, Crompton Greaves faces SEBI probe
20 July 2011

Bad numbers, stock crash and now a probe by market regulator Sebi. Engineering major Crompton Greaves has had a tumultuous week so far.

Sources have told NDTV that Sebi has asked stock exchanges to provide trading patterns in Crompton Greaves over the past three months. This after analysts slammed the company for possible insider trading by a former official, who sold his entire shareholding in early July, days before the first quarter results were announced.

Sources say SEBI is checking if the promoters/management failed to make a public announcement for personal advantage. The outcome of Sebi's preliminary investigation will determine if a show cause notice has to be sent to the company.

Stocks of Crompton Greaves have crashed almost 30 per cent over the last two days on the back of a 58 per cent decline in consolidated net profits.
The management of the company has come in for a lot of flak for its decision to buy an aircraft for Rs. 232 crore in the face of declining profits. The management commentary outlining the worries the company was facing only added to the worries.

Apart from the losses at its European subsidiary, the company is also facing headwinds from rising input costs in its power business which was reflected in its EBIT margins dropping to 2 per cent as compared to 10 per cent last year.

The company's consumer business also saw flat growth with inflation continuing to remain sticky and it had to revise its guidance down sharply from 12-15 per cent revenue growth earlier to 10-12 per cent.

Read more at: http://profit.ndtv.com/news/show/after-stock-crash-crompton-greaves-faces-sebi-probe-165319?cp



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