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L & T Finance drops below Rs 80 ~ Insider Trading!? ~ 14-Mar-2014
Both parent company Larsen and Toubro and L & T Finance Holdings issued notifications to the BSE and NSE that Larsen & Toubro will be Offering For Sale Shares of L & T Finance through the Open Window on the Exchanges today through Broker Credit Suisse Securities (India) Pvt Ltd
The Notice that announces the Floor Price of Rs 70 carries a paragraph in the Larsen & Toubro Letter requesting the Exchanges to disseminate the Floor Price Information only after Trading Hours on March 13,2014,a day before the Offer for Sale is being made as per SEBI Circular
Clearly this Offer for Sale is to bring down Parent Larsen & Toubro Equity Stake in L & T Finance Holdings to 75%
Questions arise….here are five of them :
Q 1 : Clearly the fall of L & T Finance from Rs 88 levels in the morning to close at Rs 79 levels in the afternoon appears to be related to this Notice of parent Larsen & Toubro to Offer Shares of L & T Finance at Rs 70 Floor Price today ! ~ who knew this before hand to take advantage of this Low Floor Price and sell Futures or even stock at higher levels yesterday !….and is it just a coincidence that The Offer For Sale Notifications were timed to be announced on the Day that L & T Finance began trading in the F & O Segment ?
Q 2: What Time did the Exchanges receive the Notices from Larsen & Toubro yesterday and how were these received..email,fax,hand delivery of letter….could not the Exchanges have released the first Notice earlier and then later the Notice that announced the Floor Price ?
Q 3: Check the Books of Brokers who have done an abnormally high Volume of Trade yesterday in L & T Finance in Spot & Futures to see if Insider Trading is indicated and if so who has perpetrated it?
Q 4: Why is the parent Larsen & Toubro selling the shares of L & T Finance now at such a low floor price of Rs 70,given that the latter is a front runner in being awarded a banking license that should be announced shortly by RBI….as it could, in all probability, have got a much better price later if L & T Finance is awarded a banking license!?
Q 5 : Has RBI told,on record or off, Larsen & Toubro or L & T Finance that the latters banking application will only be considered if the parent bring down the stake to 75% in L & T Finance,the license aspirant and applicant before they announce who have been awarded the new Licenses !?…and this has led to Larsen & Toubro coming out with the Offer For Sale today and it has nothing to do with March 31,2014 Financial Year Closing!….or more importantly does this Offer For Sale signal that L & T Finance will not get a Banking License !?
There is clearly something amiss in the timing and pricing of this Offer For Sale and clearly there has been Insider Trading yesterday in L & T Finance related to the Notices for this Offer send yesterday to the Exchanges
For the sake of all Investors Confidence and Credibility of our Exchanges,SEBI must investigate these Questions posed above
Larsen & Toubro and L & T Finance are market leaders in capitalisation and widely traded and held…..it is important that SEBI certifies that all is in order !