The “Rakesh Jhunjhunwala Surana Solar Scam” will go down in history as one of the simplest scams enacted. An operator bought a chunk of shares of Surana Solar Ltd, a little micro-cap, in the name of “Rakesh Jhunjhunwala”, the Badshah of Dalal Street. As soon as the news was made public, there was frenzy amongst the punters to grab the stock. This sent the stock price surging to an all-time high of Rs. 63. At this stage, the operator dumped his holding of the stock, leading to abnormally high volumes on the exchanges. Later, when news leaked that the “Rakesh Jhunjhunwala” who had bought the stock in the first place is not the Badshah of Dalal Street but a namesake, the stock price plunged to a low of Rs. 32.
The result is that punters who dived into the stock in the belief that the Badshah had bought the stock are facing colossal losses.
Now to the good fortune of the punters, SEBI and the stock exchange authorities are investigating the alleged scam.
The BSE has issued a circular dated 12th June 2015 stating that SEBI vide its email dated June 11, 2015 has directed the Exchanges to withhold pay-out in the scrip of Surana Solar Ltd. (Scrip code 533298) for June 10, 2015 and June 11, 2015, till further notice. This was followed by another circular of the BSE dated 12th June 2015 directing its members not to effect any payout to their clients (both funds and securities) for the trading done in Surana Solar on June 10, 2015 and June 11, 2015.
Now, we have to see whether there is in fact a namesake called “Rakesh Jhunjhunwala” who bought the Surana Solar stock or even the name is bogus. If SEBI finds the transactions to be bogus, it could nullify all the transactions, resulting in massive relief to the punters.