May 14, 2011

CRB Capital Investors - Message to the Blog


Good news for CRB Capital Markets investors

http://www.livemint.com/articles/2011/05/03211357/Depositors-in-CRB-Caps-sister.html?atype=tp

For buying and selling any unlisted/suspended/unquoted shares kindly contact on 08108303330 or dharawat1@gmail.com


Extract of the article

Depositors in CRB Caps, sister firms may get some money back

Liquidator to repay people who deposited up to Rs.50,000 within six months; repayment may run into Rs.100 crore

Fourteen years after CRB Capital Markets Ltd went bust, a section of people who had deposited money with the non-banking financial company (NBFC) and a clutch of sister firms between 1992 and 1996 could be repaid.

The Delhi high court recently formed a seven-member disbursement committee to repay people who had deposited up to Rs.50,000 with CRB Caps—the name by which it was popularly known in its heyday. This committee is to conclude payment of around Rs.100 crore within six months, according to the court’s order.

Founded by Chain Roop Bhansali, a Marwari brought up in Kolkata, CRB Caps and its sister firms such as CRB Mutual Fund and CRB Share Custodian Services Ltd raised at least Rs.600 crore from the public in five years till 1996 through instruments such as fixed deposits, bonds and mutual fund schemes.

The fall of CRB Caps was a watershed event, following which regulations were tightened and many other NBFCs went bust.

Bhansali also raised large sums of money from state-owned banks such as State Bank of India (SBI) and Bank of Baroda.

Bhansali’s aim was to turn CRB Caps, his flagship firm, into a bank; it had cornered a substantial stake in the erstwhile Bank of Punjab, recalls Ajit Day, stockbroker and former president of the Calcutta Stock Exchange.

Besides a high interest rate, Bhansali offered huge cash incentives on deposits that were paid upfront, Day added.

To make his deposit schemes attractive, he even obtained a facility from SBI under which depositors could present redemption and interest cheques issued by CRB Caps at any of the bank’s 4,000 branches at that time. In those days, branches of Indian banks were not interconnected, and it took days, sometimes weeks, to realize money from outstation cheques.

Bhansali’s house of cards eventually collapsed in 1997 following a Reserve Bank of India (RBI) investigation launched in September 1996. It revealed several financial irregularities, and in April 1997, RBI restrained CRB Caps from raising fresh deposits.

CRB was already in a debt-trap, taking fresh loans to repay old ones. Soon after RBI put fetters on its operations, its cheques began bouncing, and Bhansali, who had famously said, “every single drop of my blood is for the depositors”, went underground.

Bhansali, who was arrested in 1997 and spent some three months in jail, turned reclusive. Though he is a member of the Delhi high court-appointed disbursement committee and is believed to be living in Delhi, his whereabouts aren’t widely known. He couldn’t immediately be reached for comments on this story.

But people such as stockbroker Narottam Dharawat of Mumbai, who had bought CRB Caps’ redeemable bonds under a public issue, are not going to receive anything under the disbursement scheme.

Dharawat had bought bonds worth Rs.7,000 in 1994-95, which got converted into shares soon. Subsequently, he subscribed to a rights issue of CRB Caps, paying Rs.9,000.

“It was such a reputed company at that time,” said Dharawat. “It raised such a lot of money from retail investors but no one knows what they did with it.”

3 comments:

Vibhor said...

Mr Dharawat, whenever some calls you, you dont have any thing to buy or sell. What is the point in wrting that you are buying and selling any unlisted/suspended/unquoted shares

Anonymous said...

Thank you very very much... i was awaiting development on this company since years ... thankssss

Satyakam Mishra said...

Part 2

"In case of a delisting through reverse book-building, the pricing can be manipulated as promoters continue to hold significant chunk indirectly, defeating the whole purpose of reverse book-building. This also creates unreal float in the market."

Investors had declined to tender their shares in some of the offers of these companies. If others follow Cookson, the premium of some companies' shares may shrink. AstraZeneca is trading at a price to earning (PE) ratio of 60 compared with Pfizer whose current PE ratio is 20. Gillette is trading at a PE ratio of 57 compared with Emami's PE ratio of around 29. Industrial equipment maker Atlas Copco paid a hefty premium early this year to buy out minority holders, when some others failed.

Goodyear offered a 33% premium in February last year that investors declined. AstraZeneca's shares rose 20% after its board approved delisting plans. It has gone up 60% in the past one year on hopes of delisting. As per notes to accounts for the results in July last year, it just mentioned that the promoter, Cookson Group Plc, UK, had transferred 11.48% to Karibu of the UK.

"The transaction involves a transfer of a 11.48% stake, it attracts certain disclosures in terms of transaction details to the stock exchanges," says Rajesh Thakkar, partner, MZS & Associates. The company declined to comment on whether Karibu is an associate.