An NRI seemingly struck gold with his $1 investment, which turned into $328 million. But this is not a mere turn of fate, as authorities have stepped in to investigate this fishy investment.
Jahangir Panikkaveettil Perumbarambathu, a Dubai-based NRI investor, had initially bought over 10 crore shares of LS Industries for just $1. But even though the company barely made any money, its shares suddenly skyrocketed in the last few months.
On February 10, Jahangir’s share was worth ₹698 crore and sold a small part of it to make a profit of ₹1.14 crore. Now the market regulator, SEBI has stepped in as LS Industries is standing at a $328 million (over ₹2,800 crore) valuation at its peak.
The authorities believe the company and its insiders artificially increased the stock price. The NRI’s selling pattern also looked suspicious as he offloaded shares exactly when the stock was at its highest.
To make things worse, LS Industries announced it was buying another company, Robochef, whose directors’ relatives sold their shares just in time to make big profits.
Now small investors are also jumping in to get a piece of the pie with the number of investors doubling in the last six months. However, the insiders have already made their money allegedly cheating the system.
SEBI is currently investigating whether this was a classic “pump-and-dump” scam, where prices are artificially inflated before being dumped on unaware investors. While it seems likely, we’ll have to wait to hear the official verdict.
