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Sunday, August 29, 2010

Bellary Steels & Alloys Ltd:-Ram Ram Japna Paraya Mal apna

Scripscan:-Bellary Steels & Alloys Ltd
Cmp:3rs
My view:-Fraud dubious company

Story:Now a days one stock which has kept me busy reverting to people query is none other than "Bellary Steels".I have been told to have a close look on the counter as its scripting a new scripture for itself.So let me proceed on:-

Year 2000-2001:-Several financial institutions on hopes of recovering their dues and to find out the unscrupulous activity of the company ordered a special investigative audit through a bangalore based firm which vindicated several inherent problems of the company like misuse of funds,horrendous financial condition etc.The investigation showed that without the permission and awarence of the board members bellary steel transferred funds to set of its own associate companies.Further the company wrote off debts,transferred goods from one company to other at a loss etc.

Year 2003-2004:-On september 2003 the Securities and Exchange Board of India and the stock exchanges decided to shift bellary steels and several scrips to the trade-to-trade (T-to-T) segment as a surveillance measure.Not withstanding the same bellary steel filed a case against the formers mentioning that the company has got listing agreement with BSE, which is a contract that binds the exchange into listing the shares in a particular segment and that it cannot unilaterally make a change.I haven't heard much about the case after that its still pending I assume.

Year 2004-05:-Economy is in upswing and the steel rally begins.From fiscal 04 to begining of 07 all companies except bellary steel had doubled,tripled,quadruppled and so on.Some even became 15-20 baggers.From sick BIFR companies those companies except "Bellary" became financially sound dividend paying companies.I can mention a nomenclature of them but bellari's fortunes never changed infact it got surmounted with more losses.

Year 2005-06:-SEBI in an interim order directs Bellary Steel & Alloys Ltd and its directors not to issue any further shares or alter its share capital till further directions.The company and its directors have been prohibited from accessing the capital market or dealing in securities, directly or indirectly.The SEBI order follows a complaint filed by KSFC against Bellary for its failure to redeem Rs 1.5 crore NCDs that it had subscribed in 1996.The story is big but in a nutshel i can only say "Mr S. Madhav" the Chairman and Managing Director of Bellary Steel is the guy behind all these scams with his malafide intention of cheating each and everyone.Mind you the guy is still the MD of the company.

Year 2007-2008:-The scrip gets an unprecedented rally and becomes a 15 bagger moves from 1 to 15 in just a matter of just 8 months.The reason which supported the spurt is said to be the company having "huge real estates(mortgages with FIs),takeover buzz by JSW steel(promoter luring of simple gullible investors),Turnaround story(Absurd stuff, company never posted any profits)blah blah.

April 2008:-Market regulator SEBI bans Bellary Steels along with 3 other entities and their directors from accessing capital markets for five years in a case involving issuance of duplicate shares.SEBI also directs Bellary Steels to cancel the duplicate shares lying in the demat account of Panchloha Hotel and take "appropriate steps.. to recognise the valid shares pledged with the KSFC) in the books of the company/STA (share transfer agent)/depositories".SEBI passed the order after investigating a complaint by KSFC inJan 2006 that Bellary Steel has issued duplicate shares with the same distinctive numbers "with the malafide intention to cheat KSFC".

Conclusion:Have I said it all or still you folks thinks it to be the next multibagger?I wonder how still it can quote at 3-4rs.OOps sorry sorry,I recall about you guys and your investments in bellary steel.Many of you are still averaging for sure...isnt it?A fraud loss making company,a cheater promoter who still is on board and holds the highest number of shares,its such a company which just exists on papers and on your demat accounts.

Still you feel it to be the next multibagger?

Regards,
ARUN
I can be reached at:-arunanalyst@rediffmail.com

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