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Shock seemed to be the common sentiment on Tuesday. "As an investment banker, I have done many transactions for Kumar Mangalam. He has never suggested anything which is not in conformity with laws and regulations. I am deeply shocked. And this incident will shock investor confidence," said Hemendra Kothari, chairman, DSP Group.
"The Aditya Birla Group follows the highest corporate governance and ethical standards. In our experience, these standards are set by Chairman Kumar Mangalam himself. Hence, we are very shocked and surprised by the action taken by CBI," said Nimesh Kampani, chairman, JM Financial.
"I was shocked when I heard about it, and it is completely unexpected," said Rashesh Shah, chairman of Edelweiss Group.
The Hindalco share saw its biggest decline in three months to Rs 105.10. But later, it recouped losses and ended the day at Rs 112.20, a gain of 1.45% from Monday's close. "We wish to state unambiguously that we have followed every process required for allocation of coal completely, as stipulated by the government policy," the company said in a statement to bourses. "Apparently this seems to be part of a larger case entailing coal allocation to companies, and being one of the companies, we are being investigated too," Hindalco explained to its investors through a one-page statement to the Bombay Stock Exchange.
CBI is probing companies after Comptroller & Auditor General of India said in mid-2012 that the allocation of coal mines without an auction had cost the government Rs 1,86,000 crore. CAG said the award of mines gave undue benefit to companies, including Naveen Jindal's Jindal Steel & Power and Tata Steel.
Shailesh Haribhakti, a prominent chartered accountant, pointed out that Birla was on the board of regulators of institutions such as RBI and Sebi. "We need to operate under clear policy guidelines. It is indeed unfortunate that to begin investigation it becomes necessary to file an FIR against a person with a clean reputation. Until recently, Birla was on the board of RBI and he headed the committee which drafted Sebi's report on corporate governance," said Haribhakti, chairman of DH Consultants.
"The Aditya Birla Group follows the highest corporate governance and ethical standards. In our experience, these standards are set by Chairman Kumar Mangalam himself. Hence, we are very shocked and surprised by the action taken by CBI," said Nimesh Kampani, chairman, JM Financial.
"I was shocked when I heard about it, and it is completely unexpected," said Rashesh Shah, chairman of Edelweiss Group.
The Hindalco share saw its biggest decline in three months to Rs 105.10. But later, it recouped losses and ended the day at Rs 112.20, a gain of 1.45% from Monday's close. "We wish to state unambiguously that we have followed every process required for allocation of coal completely, as stipulated by the government policy," the company said in a statement to bourses. "Apparently this seems to be part of a larger case entailing coal allocation to companies, and being one of the companies, we are being investigated too," Hindalco explained to its investors through a one-page statement to the Bombay Stock Exchange.
CBI is probing companies after Comptroller & Auditor General of India said in mid-2012 that the allocation of coal mines without an auction had cost the government Rs 1,86,000 crore. CAG said the award of mines gave undue benefit to companies, including Naveen Jindal's Jindal Steel & Power and Tata Steel.
Shailesh Haribhakti, a prominent chartered accountant, pointed out that Birla was on the board of regulators of institutions such as RBI and Sebi. "We need to operate under clear policy guidelines. It is indeed unfortunate that to begin investigation it becomes necessary to file an FIR against a person with a clean reputation. Until recently, Birla was on the board of RBI and he headed the committee which drafted Sebi's report on corporate governance," said Haribhakti, chairman of DH Consultants.
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