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Thursday, February 25, 2010

TeleCanor Global Ltd:Buy/sell/hold,growth prospects and recomendation,news and results,target price and analysis,views and outlook

Scripscan:TeleCanor Global Ltd

Story:I have an analyst friend who is quite a known name in the stock market fraternity.Now sometimes back I received a mail from him which stated telecanor global to be a strong buy.He was very bullish on the company and to he took a large stake in the counter through preferential allotment.Several months wentby and suddenly oneday he mailed me to exit the company immediately.In anycase I was not having the shares but he briefed me the story which am summarizing here."I pumped funds into the company in 2008 when it barely had resources to make salary payments to its employees.An investment banker introduced me to the promoter. That time, the company had no business and no money to pay even the salaries (of its employees). I liked the concept of payment gateway as it had good potential.However, more than a year has passed and the company has apparently made no headway in the payment gateway business.The company Board had decided to issue 7.84 lakh equity shares and 12 lakh warrants in my favour, a resolution to which effect was passed on 22nd June 2009.I made a payment of Rs 1.26 crore towards the same.But the company neither issued any shares and warrants nor refunded my money—it instead used the money for the company’s business. As per SEBI guidelines, an investor is supposed to pay application money within 15 days of passing the resolution; however since the company needed funds urgently to fund its payment gateway business,I made initial payment towards the application much earlier than the stipulated period.I feel the promoter has siphoned off Rs60.27 lakh by way of salary. The promoter’s wife, who is also the director of the company, has taken Rs47.92 lakh as office rent.Telecanor has used various tactics to increase its share price. The company apparently attempted to convert my 4.5 lakh warrants into equity shares, but was forced to cancel the same on my refusal.To my horror and shock,TeleCanor had called a Board meeting to declare interim dividend, despite having no bank balance to refund my money or any funds to kick-start the payment gateway project. The company’s only purpose was to jack up share prices by misleading the investors. The Board has since announced its decision to skip interim dividend ‘since it is prudent to complete the ongoing project before such a resolve".This is what I got to know from him.Now you people decide accordingly.

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