MBL Infrastructures Limited had tapped the capital markets with a public issue for 57 lakh shares in the price band of Rs 165 to Rs 180. The issue had opened on the 27th of November 2009 and closed on Tuesday the 2nd of December 2009. The issue was subscribed to the tune of 1.97 times, but the retail portion and employee quota was both under subscribed. This writer had recommended avoiding the issue as it was expensive.
MBL has issued a ‘notice to investors’ in regard to a letter received from SEBI dated the 7th of December 2009. The notice gives an option to all categories of investors to exit the company. This option is being given because the company has now made disclosures which could affect the company and hence affect the decision to invest by potential investors.
There is a dispute between the Road Construction department of Jharkhand and the company over a project of road building involving two different projects, one of 15 kms and the other of 23.5 kms. There have been lot of issues concerning satisfactory execution of these projects. The state department of Jharkhand has withheld payment and also show caused the company why ‘CRIMINAL CASE is not initiated and the company is BLACKLISTED”. MBL is contesting this in a court case in Kolkata but very clearly with a PIL also being filed against the State and the company for the same case, there appears that there is more to it than meets the eye.
It may also be mentioned that when questions about the company and its business were being discussed during the road show the company and its merchant bankers were not forth coming in answering them and kept on avoiding unpleasant answers using the standard comment ‘ not part of the RHP’. This gave the impression that there were many unpleasant and hidden skeletons in the past which needed to be kept hidden.
This is a great opportunity for all those who applied half heartedly and were not sure what to do. Withdraw your application from a company who does not want tom come clean ant the time of going public. Once it has the money it will never bother about its minority shareholders.
WITHDRAW YOUR APPLICATION. LAST DATE FOR WITHDRAWAL 22ND DECEMBER 2009
