Aftek begins moving from sub Rs 10 to now Rs 11.50…Expect Fireworks

Simply cannot figure out why Aftek is ‘kept’ this low at Rs 6 to Rs 10 range for a long time…Key word here  is ‘kept’.Today it broke to Rs 11.50 with fairly strong volumes of over Three lakh and Six Lakh Shares on BSE and NSE respectively.

With over Rs 30 cash/share , as over Rs 300 crs in cash,most of it lying in a Portugese bank as a Dollar Deposit or in a Current A/c and with little debt and a high Book Value of Rs 90, what is holding Aftek back at Rs 10 levels ?

One would suspect that the Company has no control over the Cash ,although the auditors,had accepted the management’s assurance that there was no remittance restriction on these funds….The Funds do exist,unlike the Satyam Saga….At the last AGM,the MD,Ranjit Dhuru was asked by an irate shareholder about this situation…He was unable to give any convincing answer…..so there is clearly a Corporate Governance and lack of Tranperancy issue here

I wonder how RBI allows Aftek to keep such large Monies for years in Portugal,when the Company has no operations there !

Aftek earns no significant Income on these Funds,but has shown a Rs 89 crores FX gain this year as US Dollar has appreciated 25% on the Rupee in 2008/9…It has used this to provide for Rs 130 crs for it’s Investment and loan to it’s German Venture which has been wound up

It’s a controlled scrip,although the shareholding pattern does not reveal it and Promoters  hold under 20 % and have not increased their shareholding….giving credence to the suspiscion that they do not control the Company’s Funds lying in Portugal…Who does then ? 

Expect fireworks in Aftek…It’s 52 Week High/ Low is Rs 56/Rs 6…so we are yet at the Lower End…..Surely expect fireworks