India Cements shares fall 5% after CBI summons N Srinivasan
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Shares in India Cements fell the most in a fortnight after the Central Bureau of Investigation summoned the company's managing director N Srinivasan in connection with YSR Congress chief Jagan Mohan Reddy's disproportionate assets case.
The CBI has alleged that India Cements invested in Jagan-promoted companies, Bharathi Cements and Jagathi Publications, and in return received huge water allocations during the Jagan's father YSR Reddy's regime.
The stock opened with a 5 per cent cut and later hit an intraday low of Rs 72.50 against Thursday's close of Rs 76.25 on the BSE. It traded 4.72 per cent lower at Rs 72.65 at 12.50 p.m., while the Sensex was down 0.6 per cent at 16,550. It was the second biggest loser among all listed cement companies on the BSE.
India Cements has seven cement manufacturing plants spread over Southern India catering to major markets in South India and Maharashtra. The capacities of its plants are over 9 million tonne per annum. The company sells cement under the Sankar Cement and Coramandel Cement brands.
"We have received a notice in the context of allocation of water towards expansion of capacity of two of our plants in Andhra Pradesh. Our senior officials have already met officials of department in the past and have submitted all the required information sought by them. We are confident that the matter will be resolved at the earliest since water allocation to our units was as per industrial policy of AP government," India Cements said in a statement.
The CBI alleges that while YSR was in office, he conspired with other ministers to influence entrepreneurs to invest in his son's companies; in return, they were granted licences and other benefits like permissions required for their businesses. The CBI inquiry into Mr Reddy's business empire and the source of its funds was ordered by the Andhra Pradesh High Court in August 2011.
Jagan was arrested by the CBI on May 27. He currently lodged in Chanchalguda jail, where he is under judicial custody till June 11.
