Prakash Industries slumps 20% in intraday deals on CARE downgrade, bribery scam

NEW DELHI: Shares of Prakash Industries fell as much as 20 per cent to Rs 65.10 in intraday deals on the Bombay Stock Exchange after CARE downgraded the company's credit rating to 'BB+' from 'BBB+', according to media reports.

Media reports suggest that the rating agency said the weakness in its credit profile was due to uncertainty over raising resources to redeem foreign currency convertible bonds worth $77.1 million.

This along with the arrest of company's Chairman Ved Prakash Agarwal and Director Vipul Agarwal by CBI in connection with the Synndicate Bank bribery scam has dented the company's image resulting in a massive sell-off in the recent past.

CBI had alleged that Prakash Industries had misrepresented facts about the net worth of the firm while applying for coal blocks. Ved Prakash Agarwal is also alleged to have offered bribe to improve the credit quality of the company.

Trading volumes on the counter have jumped over two times as a total of 1.5 million shares have changed hands compared to average of 6,00,000 share traded daily in the past two weeks.