JSW Steel shares dipped 2.75 per cent to Rs 726.5 on Wednesday on the BSE following filing of bribery charges against top company officials. The stock touched an intra-day low of Rs 719.15.
The Central Bureau of Investigation on Tuesday filed a chargesheet against Sajjan Jindal, Chairman of JSW Steel, and two senior executives, Vinod Nowal and Vikas Sharma, for bribing the Karnataka Government to acquire iron ore from illegal mining. The CBI has also filed charges against former State Chief Minister B. S. Yeddyurappa and some of his family members.
Denying any wrong doing, the company claims the conclusions drawn by the CBI are “without basis.” JSW Steel claimed that during investigations, the company had co-operated with the “investigating authorities and provided all the details in connection with the alleged transactions.’’
Not to impact
According to an analyst, the charge-sheet may have no material impact on the company but its officials may have to dedicate much time on this issue rather than focusing on expansion plans. The Coal Ministry recently cancelled the coal block allotted jointly to the company and Himachal EMTA Power Ltd at Gourangdih in West Bengal.
JSW Steel, which is the third largest steel company, said it is thinking of moving the court against the de-allocation order. The mine was allotted in July 2009.
The Government had de-allocated the block on the recommendation of an inter-ministerial group, which had found that the project developers had failed to develop the block within the prescribed time and had not achieved critical milestones, including forest clearance and land acquisition.
In 2007, the company proposed to set up a 10 million tonnes a year steel plant at Salboni in West Bengal with an investment of Rs 35,000 crore. It has already invested about Rs 500 crore in acquiring land and carrying out initial works at the project site.
Board meeting on Oct. 28
The company’s board is meeting on October 28 to consider September quarter results. For June quarter, JSW Steel’s net profit more than halved to Rs 269 crore due to a forex loss of Rs 592 crore. Sales were up 28 per cent.
On a consolidated basis, the company’s net profit plunged 88 per cent to Rs 50 crore (Rs 485 crore) after considering a loss of Rs 160 crore recorded by associate companies.