InvestorQ : What is the reason that Shree Cements stock has corrected so sharply in the last few weeks?
Arusha Ray made post

What is the reason that Shree Cements stock has corrected so sharply in the last few weeks?

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2 weeks ago
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Shares of Shree Cement have corrected nearly 12.5% after peaking on 08 April. Such a sharp correction on a stock like Shree Cements in a very short span of 15 days is very unlike Shree Cement that has always been a sedate mover upwards. The reason for this has more to do with corporate governance issues raised by proxy firm, InGovern, rather than having anything to do with business performance. Here is what happened.

It has been reported that NBI Industrial Finance Company, the holding company of Shree Cements, had sold shares of several unlisted companies in its books some 5 years back to promoter entities for Rs.89 crore. What raised a real corporate governance issue is that the fair value of these unlisted entities was estimated at Rs.3,077 crore and that has resulted in this entire furore over stock price.

InGovern Research Services, a proxy advisory firm, has alleged that the sale was made by NBI to promoter group entities without prior shareholder approval. This is a major issue of corporate governance and that has depressed prices in the market. The exchanges have already sought clarification from the company on this subject.

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