Stripping or Stealing the Listed Company of Assets ! ~ How Promoters are suspected to do it and Auditors suspected to allow it !

You’ve heard of Naked Speculation ! but have you heard of Naked Companies that have been rendered so because they were stripped off their Assets by their Own Promoters  !!!?

Have always known how Indian Corporates ,even some of the well known names, indulge in siphoning off funds and stripping and stealing assets of the companies they have promoted or taken over !

In fact this reality is well captured in the tagline for my blog  ” In India,Companies may fall sick but Promoters rarely do !”  

read more

Adieu 2010…Welcome 2011….Hope we get to welcome a ‘Magic’ Stock yet again !

Adieu 2010…Welcome 2011

They Say Our Life’s Expectancy is measured by the Number of Breathes we take…there’s a finite number pre ordained for each one of us….so here’s wishing that you take fewer Breathes in 2011,so that you live longer !

So Breathe Deeply and make your New Year Resolutions….and Breathe Deeper when you break them !

Given you some really huge Multibaggers in the 21st Century…Matrix Labs,Mercator Lines,Essar Oil,Sagar Cements,ICSA,Sesa Goa to name a few….have positioned you with a few more for the coming years

read more

Sesa Goa declares stellar Q1 FY 11 Results… yet many`Experts’ say ‘Sell’ or ‘Don’t Buy’ at Rs 350… Why ?

Expected this… a fabulous Q1 FY 11 for Sesa Goa… It’s best first quarter in history.. a consolidated net Profit of Rs 1302 crs giving an EPS of over Rs 15 on an Equity of Rs 85.97 crs (FV Rs1)… this was achieved due to higher Iron Ore Prices in the Quarter and good offtake by China and consolidation of Dempo Companies acquired in June 2009

So what’s prompted many leading FIIs to call a ‘Sell’ on Sesa Goa ?….. Prices have eased off and China is expected to slowdown offtake…. moreover it is widely expected that the Government will introduce a Special Tax on Windfall Profits just as has been proposed in Australia or may raise royalty rates…. and may even take an extreme step of curtailing or banning exports of iron ore…. Moreover Sesa Group is facing an investigation from the Serious Fraud Investigation Office for mismanagement, malpractices, financial and other irregularities ….. there is also the question of the pending amalgamation from April 1, 2005 of subsidiary Sesa Industries with Sesa Goa.. Sesa Group has moved the Supreme Court after the High Court had overturned an earlier order in it’s favour and the validity of the scheme has been extended to October 31, 2010…. an aggrieved shareholder had filed the case and Sesa suspects that this shareholder too is behind  the SFIO Investigation

read more

Sesa Goa drops 20% from all time high of Rs 490+ to below Rs 400…It’s a high Beta scrip…so volatility is expected

Dear Madhu,Hope this updated view on Sesa Goa answers your query you just posed on another blog….I’ve put it up as a seperate blog as it will serve a wider audience

In 2009,Sesa Goa had scaringly dropped to Rs 60 from levels of near Rs 175…and then burst away to record an all time high of Rs 490+….and in a matter of a few days now it has dropped below Rs 400

So what’s what’s unnerving Investors to unwind their positions in Sesa Goa?…a few weeks ago it was the ban on import of Iron ore of Fe content 60 and below announced by the Traders Association in China….I had blogged that this would not really impact Sesa Goa too much….but investors were unnerved and began reducing exposure…Price dropped to below Rs 430…and then came a bombshell from the Australian government…actually they had warned in January of sweeping tax changes in the Mining Industry…From July 2012 the Australian Mining Industry will face a higher tax of 40%  on the ‘super profits’ that they are making….US $ 2.8 Billion is expected to be the Tax collection from this Industry in 2012…BHP Billiton,Australia’s and the worlds biggest Mining Company expects their average tax rate on operating profits to go up to 57%……Mining Sector Sources opine it will lead to rising iron ore prices and China will have to absorb this…it may deter though,Overseas investments in Australia and impact the country’s competiveness….As expected,this tax hike announcement is facing very strong opposition in Australia…One view is that it is not fair to tax Mining Companies higher as their record profits have saved Australia the blushes in the Financial Mess that has enveloped the Developed Nations….also it is unfair to first allow billions of dollars in as overseas investments in ongoing mining projects and then hike the tax rate on profits that are expected to be generated  

read more

Sesa Goa drops from Rs 490 to below Rs 470 reacting on News of a Chinese Ban on Imports of Iron Ore below 60% FE content…Should it cause any Worry?

Just last evening there was a News release that China’s Iron Ore Trading Association has banned it’s Members from Importing Iron Ore with a Fe Content of below 60%

Will this affect Sesa Goa?….Markets think so and have dropped the Share Price from Rs 490+ levels to below Rs 470 levels as I blog

If at all Sesa Goa will be impacted,It should merely be marginally….. and should not panic you to exit your Holdings…here are two brief reasons for this

  • The Ban does not cover the Actual Users, the Chinese Steel Mills… and their Licensed Agents…They can continue to import directly their requirements…Sesa Goa will cater direct
  • Sesa Goa deals also in Iron Fines with a Fe content of 61% to 63% 

China’s iron ore import needs are middle and low grade fines  with Fe content of 63.5% and below…Sesa Goa caters to this….Brazil exports largely high grade Ore

read more

Sesa Goa Up at record New High at Rs 494…More upmove potential…..but Sensex Down 256 points to 17714

After kissing 18000 yesterday after a two year gap,the Sensex dropped 256 points today to close at 17714…it was in the red right from day’s start at 9 am till close at 3.30 pm

But Sesa Goa surged to a record high of Rs 494+ and closed a few notches lower at Rs 490….I’ve been recommending this scrip vigorously from mid 2008…and I believe it’s positioning itself beautifully to move to record highs again in the months ahead…I will not be surprised if it crosses the four digit quote of Rs 1000 in the next 12 months

read more