Prakash Inds at new low

Prakash Industries hit a new 52-week low today at Rs.83.10 and continues to remain firmly in the red.

This is the coal scam catching up. Today news is that the Enforcement Directorate (ED) has attached movable and immovable properties worth Rs 117 crores of Prakash Industries in a money laundering case in connection with coal block allocation scam.

The CBI had registered an FIR against Prakash Industries Ltd., alleging that the company had applied for allocation of Coal Block vide an application dated January 12, 2007 to the Ministry of Coal in response to an advertisement issues on November 13, 2006.

The ED probe revealed that the company filed false declaration with the on November 17, 2007 intimating allocation of the coal block which was actually awarded on February 6, 2008 jointly to Prakash Industries and SKS Ispat Power.

The ED said in a statement, “As a result of filing of this false declaration, the shares of M/s Prakash Industries recorded an astronomical rise in their value. At one point in time i.e. on 02.04.2007, the share price was Rs 31 per share whereas on 04.01.2008, the share price was Rs 351 per share.”

It said that in order to encash the artificially created rise in the share value, the company issued  62,50,000 preferential shares at a premium of Rs 180 per share and sold these shares to five selected companies. In the process, the company generated Rs 118.75 crores in the form of share capital. The amount of Rs 118.75 crores, which was generated as a result of the offence under PMLA , amounted to proceeds of crime.