Cupid Ltd. Shares are suspended from BSE exchange

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20160328-15

For the information of the members. I do not know the further consequences, if some members can shed some light on this?

 

looks like suspension due to non compliance, information sought by BSE wrt preferential issue

Spoiler: Suspension of companies as a Surveillance measure - update

This is in continuation of the Exchange notice no. 20151218-28 dated December 18, 2015 and 20160115-8 dated January 15, 2016, inter alia, informing about suspension of companies as a surveillance measure.


Trading Members are aware that, in past, SEBI had passed several orders against the concerned parties/companies, inter alia, in relation to unusual price movements vis-a-vis preferential issue price and weak financials of the company. In addition to aforesaid, Trading Members are also aware that the Exchange had suspended trading in the securities of various companies on account of surveillance reasons.


It is noticed that there has been substantial increase in manipulation/abrupt movement in the prices of securities wherein common modus operandi is through the route of preferential allotment.


While the Exchange, from time to time, has taken requisite steps to detect and contain such instances, it is felt necessary that further pre-emptive measures should be adopted to curtail misuse of the Exchange’s system.


Accordingly, as informed earlier various enhanced surveillance measures such as reduction in price band, suspension in the trading of securities, etc., shall be adopted by the Exchange.


On this background Trading members are hereby informed that following process shall be followed for suspension and revocation of such companies:


a)Pursuant to the provisions of Rules, Bye-laws and Regulations of the Exchange (Bye-law 21), trading in the securities of the companies satisfying the parameters of the Exchange shall be suspended till such time the company submits the auditor certificate confirming compliance with regards to the preferential issue(s) made by the companies.

i)Amount raised under each of the preferential issue

ii)What was the object of raising the fund

iii)How the preferential issue benefitted the company

iv)There is no mis-utilization of funds raised under preferential basis. To be duly supported by bank statement of the company.

v)Money raised as above has not been transferred back to the preferential allottees/ promoters/ directors directly or indirectly


b)Auditor certificate needs to be duly supported by all the relevant documents relied upon along with the adequate cross references.


c)Exchange shall carry out initial verification based on the below mentioned documents to check completeness of the submissions made by the company and deficiency, if any, shall be informed to the concerned companies.




Sr. No.

Particulars

1.

Resolution passed by the Board of Directors of the company for preferential issue

2.

Notice sent to the shareholders regarding preferential issue

3.

Resolution passed by the shareholders

4.

Documents in support of how preferential issue benefitted the company

5.

Resolution passed by the company for allotment of preferential issue

6.

List of allottees (whether Promoters/ Non-promoters, PAN etc.)

7.

Auditors Certificate - Supporting documents relied upon by the auditor giving the names of preferential allottees/ promoters/ directors confirming that money raised as above has not been transferred back to the preferential allottees/ promoters/ directors directly or indirectly

8.

Bank statements indicating -

a)receipt of funds (highlight the entries as per list of allottees in company’s bank account, funds to be received before the date of preferential allotment)

b)utilization of funds (highlight the entries as per list of entities to whom funds were transferred & to provide copies of MOU/agreement entered into with these entities)




d)In certain instances, it has been observed that certificate issued by the Auditor consisted of bald statements with regard to issues mentioned in the aforesaid Exchange notices without any supporting documents and adequate cross reference therein. In view of the same, in order to smoothen the process of verifying the completeness of documents, it is once again clarified that the certificate issued by the Auditor should contain adequate reasons backed by supporting documents with proper cross-reference in order to adhere to the spirit of aforesaid Exchange notices


e)After receipt of complete documents, the matter shall be placed before the Auditors Committee of the Exchange (“Committee”) to ascertain the veracity of reasons given by the company in fulfilment of conditions stated in aforesaid notices of the Exchange for revocation of suspension.


f)Wherever required company officials and / or certifying auditors shall be called for personal hearing before the Committee for providing submissions / clarification as may be sought in the matter.


g)Based on the recommendation of the Committee, the Exchange shall take further action in the matter.


h)If the certificate submitted by the company confirming compliance with each of the points for preferential issue together with relevant supporting documents and same is found to fair and reasonable by the committee then


§Based on recommendation by the Committee, process for revocation of suspension shall be initiated

§Upon revocation, securities may be placed in the appropriate price band as may be decided and shall be subject to extant price band review policy of the Exchange.




i)If the certificate submitted by the company is not found to be in compliance with then


§Upon findings of the committee, a show cause notice shall be issued to the company giving findings based on the analysis carried out by the committee.

§Based on company’s response matter shall be placed before the Disciplinary Action Committee (DAC) of the Exchange for appropriate further action.


j)It may be noted that in case of any discrepancies observed in the auditor certificate in future, the same shall be viewed seriously including referring of the case to ICAI.


In case of any clarifications, Trading Members/Company may contact Mr. Kinnar Mehta (022-22728083) / Ms. Purnima Kotian (022-22728795)



For & On behalf of BSE Ltd.




Rajesh Saraf Rajesh Gandhi

Sr. General Manager Assistant General Manager

Surveillance & Supervision Surveillance & Supervision


March 04, 2016

you can't trade till the companies comply and suspension is revoked

 

Will it be going to be scenario like Kingfisher airline as this stock is lower circuit today.How to get out from this stock in this scenario?

 

https://capitalmind.in/2016/03/bse-...-stocks-for-preferential-allotment-of-shares/

 

Gosh! I hope not @anbulina! Many investors have pretty big investments in this company. However I think this is a notification issue (a technical compliance issue). Management should be able to clear the air. Lets hope for the best.

 

hope and pray that your order gets executed or Cupid turns out to be real "safe play" for all the "value investors" who are panicking at the prospect of a suspension from trading (nothing changed wrt business)

KFA is already the poster boy for bad loans while there's cos with bad loans that are considerably bigger problems for the banks, don't mix "con*#!s" and "airlines"

a good reference regarding the political patronage regarding SpiceJet (Ajay Singh - BJP) and the preferential warrant issue to Marans is sub judice, could be the reason why it's still traded

wonder what happens to this guru mantra

 

From valuepickr website:
-----------------------------------

Your post made me thinking and went thru all the news information as given to BSE since 17-6-2010. I have some questions.

1.Preferential allotment on 17-6-2010 11.50 lacs shares @ Rs10.50. Market price Rs 9.88. What is the need for preferential allotment when the market price is Rs 9.88. Promoters could have purchased from the market. Share holding Pattern June Promoters 36.92 Public 63.08
2.Preferential Allotment Rs 15 lacs on 3-5-2011. Market Price Rs 7.93 Shareholding pattern June 2011 Promoters 44.46 Public 55.54
3. You find lot of intimation to BSE on receipt of orders ( even small orders), signing of agreements,etc. These are done regularly. What is the need to intimate each and every order received, even small ones.
4. There is no repeat of orders convincing ones. There was orders from India Govt for Nirodh but we all know how these orders are managed. There was an order from Brazil Govt on 30-7-2011 but no repeat. WHO orders can change any moment as international bidding/lobbying involved.
5. There is an intimation to BSE on DKT India , a charitable organisation. But in DKT website no mention of this. If it is such an important thing, DKT India should have mentioned it.
6. Safeware Company - If you see their site, there is no mention of any condom business as they are into Polyproplene business and no mention of any tie-up with Cupid.
7. After safeware news, promoters sold and till date there is no trace of Safeware Co, looks like a company with no history.
8. Please analyse the changes in shareholding for people holding more than 1%. I did from June 2010. You will find frequent changes in the list.

I may be wrong but my experience says when in doubt stay away. Only time can tell whether all these doubts will lead to something or just become useless analysis. There is so much data I analysed and I dont want put all the data here as it will clutter the post. Hence, I have listed my observations here but not conclusions. As a retail investor, it is very difficult to draw any conclusions or say anything with firmness.

Now from my 3 decades experience, I will explain about this warrants business.Please note lot of credence is given if it is direct purchase from market as it is a clean transaction.

First warrants are allotted to promoters. Funding comes from India or abroad . The fund from abroad can be a source of black money routed back to India. Local sourcing has reduced as there is lot of vigilance now. The money diverted to local operators to ramp up the prices. Since the companies dont declare where these funds are put to use. Now the promoters keep on selling the stake to unknown entities ( there are 1000 companies in India ) who in turn sell the shares in market and pocket the fees or profits. Let me not go into detail. Over the time promoters stake is reduced or stay their for namesake and these unknown entities are wound up or just disappear.

Since no debt involved , nobody bothers and equity risk cannot be questioned by a third party.

There is nothing which investors could do now as the onus is on the Company to come out clean. Only time will tell whether it is an error committed by BSE or a slow death for the Company.

My guesses or analysis may be wrong and Cupid in fact can turn out to be a good Company. But,as of now,there are doubts and there is no clarity.

Disc: No holding.

 

Very valuable information. Preferential allotment at below FV is very strange and poor business practice. However I did not understand the warrant information. Warrants are issued to promoters or are they issued by promoters ? Also if I am not wrong warrants have set terms for conversion into equity shares (in terms of price and date)? Did the company issue warrants also?
I remember when I wrote about manipulation in regard to Lycos internet many people had confronted me ? Cupid was also one of those stocks which was discussed in this forum.

 

the preferential allotment was at a price not less than Rs 10 (face value), no management would make a preferential allotment at a price lower than the trailing market price to send out the wrong signal (the guy who posts it says they could've bought from the market - creeping acquisition, instead of issuing warrants - preferential issue)

warrants are issued by the company (a board which eventually is controlled by the promoters and even represented on the board) so you can guess who issues and who benefits

warrant gives the investor the right to purchase an underlying stock at a predetermined price and time, within 18 months (it is not an obligation) if the situation turns out to be bad, the investor can choose to not exercise their right if the market price is below the predetermined exercise price

Cupid could be one of the stocks that may have been discussed on this forum, that's not the point. It's discussed in great detail by a forum that claims to be "separating wheat from the chaff" and the sheep start showing up at the slightest sign of trouble. If they were indeed the disciples of the great "value investor", there wouldn't be any panic now.

it's as simple as the stock exchange seeking information regarding some preferential issue which the company should furnish and it's business as usual, "retail shareholders, value investors" have the option to sell and exit if they aren't comfortable with the corporate governance or stop trading in such companies rather than saying that "retail investors will take legal action against BSE", if they are really that confident, why don't they?

btw SEBI (Issue of Capital and Disclosure Requirements) deals with preferential issue

not a confrontation, just some time to spare and thoughts to share

 

I erred in phrasing my point. The point I was trying to make was that issue of preferential shares at distressed market prices is not sound business practice. Actually buying at market price was a far better option because equity base would have remained unchanged. Preferential allotment increased the equity base reducing share value.
There are certain rules and rights of minority shareholders. If the promoters make dubious decisions minority shareholders have a right to protest.I agree minority shareholders can sell out but they can also challenge decisions which lead to erosion in shareholder value. Whether a retail investor or value investor at least they have a right to protect their hard earned money.

 

the preferential issue was at a price more than the market price, this was back in 2010-11 when the stock traded sub-par

Cupid's not really been the love of value investors forever, it only caught their fancy towards the end of 2014

not arguing the point of a "preferential issue", the word is self-explanatory, these "retail/value investors" don't complain if there's a rise that defies all logic, but is explained on some blog with self proclaimed gurus selling a stock, but if a stock exchange takes some measure to ensure compliance with some regulations that's apparently to protect the rights of minority shareholders, all hell breaks loose!

btw you could take a look at Vividha (Visagar Polytex), it's very recent and appears to be clear case of stock price manipulation, sure it'll help retail investors

 

I do not care about Vividha because its an open and shut case (I had read about the stock sometime back) but Cupid appears to be case of stock manipulation to "trap retail investors". Actually I had read about Cupid on this blog and was suspicious but chose not to write in absence of information. Now when somebody brings correct information to the fore they should be appreciated.
The management logic is unconvincing. If the issue was of 5 years back then why could not they give details to SEBI. The shares have been suspended from trading. Who will compensate the retail investors ? Has hard earned money not been lost. If any "guru" writes and encourages stock manipulation s/he would also be criticized and lose his credibility.

 

whoa! that's some blasphemy and hypocrisy right there

if you pretend to be crusading for the "retail investors" & preaching "value investing", you should've told the people about Vividha, since you had read about it some time back and it is rather amusing that without any information, you were suspicious

why no care for the losses of retail investors in Vividha, considering that even after the massive fall, the MCap of Vividha is a little more than Cupid's

who's to be appreciated? do let me know, i'll drop a personalised mail with a ton of gratitude on behalf of all the "retail/value investors" who are now whining, they forget that there's no free lunch!

compensation? credibility? are these people naïve? it's equity, risk of losing your capital!

perhaps, you could start with this critical point of highlighting the inherent risk of losing your capital when investing in equities

or people could look at "capital protection & guaranteed returns stocks" suggested by a member

 

"blasphemy and hypocrisy ". You know I am amused than angry. I read about Vividha on moneycontrol website. It was shown as company that rose some thousand times without any profit. As I thought it was open and shut case I chose not to write about it. I did not imagine any "retail" investor putting money in that stock. You are right I will mention that there is risk of loss of capital when investing in stock markets. Thank you.

 

Well said BB... I was in fact waiting for your revert. Didn't want to butt into your bilateral.

the cacophony of crusading for retail investors and recommendations with no vested interest or bias (unlike that by stock gurus) was beginning to breach tolerance levels.

Nobody should make good the loss of retail investors ( a breed with little knowledge but stuffed with greed). They deserve the loss they suffer.

 

gosh you had to be told that the foremost highlight when taking up the cause of retail investors is "risk of loss of capital when investing in equity"

Come on dear @bholu we expected something better.

But I agree with your point about shaming the so called stock gurus all of who that profit from their stupid fan followings. Now that you are at the forefront of investor protection why dont you start this too ... Direct with names.

Hope the admin in here will tolerate your posts. They seem to be intolerant towards anything negative written about a non entity called PE.

Btw I read elsewhere you are Calcutta based. Heard about the flyover crash. Hope all your near and dear are safe and sound.

Also it would be of interest to all ( I hope and certainly to me) in here if you are able to highlight any undervalued Calcutta listed stocks - with a potential of value unlocking if listed on BSE or NSE - like for eg Lux Industries

 

Darth ji,
I do not know where I have mentioned my location but your knowledge has made me feel a bit uncomfortable. It seems some members know about me though I have not shared any details with them. I am certainly uncomfortable if not concerned.
However I have already mentioned the risks from investing in stock markets. Please check this thread. My comment is under the same name as used in this stock talk forum. However I appreciate your concern. I am safe and my hopes and prayers are with deceased and survivors.

https://rakesh-jhunjhunwala.in/namo...-for-heavy-losses-to-investors-soga-raga-mms/

I am not consciously crusading for retail investors, or maybe I am. This forum is platform for sharing ideas and information. If I know correctly there are 3000 members who are a part of this forum. I hope to share ideas and gain information. I do hope I am beneficial to some if not everybody. Rest, I leave it to your and BB's valued judgement and opinion.

I am sorry but I do not track companies which are only listed on CSE. If anything comes up in the future I will share my ideas in this forum.

 

I erred a bit. Should have mentioned Bengal. Spooked are you? You should be - not of me surely but generally. Many dont realise the personal info they put out inadvertently.

Will give you a hint - Lupin - Exit or Hold. Maybe another instance of you posting when sleepy.

 

I do remember the post and I do remember I mentioned Bengal but it seems your information is from a different source. If your efforts are towards gathering my personal information I am willing to share as much if that helps you. I certainly will.
I am spooked but I always draw courage from what a friend of mine told me. "All along your life you have to meet difficult people and learn how to deal with them." My efforts in this forum are not to prove anybody right or wrong but to be of help. Any criticism I get I use it as an opportunity to be more resourceful and accurate.

 

Wow.... Self contradiction at the fore. First it is ' i do not know where i have mentioned my location' with a follow up ' i do remember mentioning bengal" . Maybe Bengal doesnt indicate a location in your scheme of things.

Honestly but i don't give a damn who you are, where you from, what you do and what your intentions are in here. So i wont waste a breath trying to get information about you from any sources. Saw the crash on TV and since i happened to be responding to you , asked after you as a courtesy.

But yes you can keep being presumptive and presume whatever you want. Btw - Thats your standout trait - being presumptive : and this is not just limited to you presuming that you are right, unbiased and fact based