Dhanus Tech is allowing investors including institutional bidders to withdraw their IPO applications. The last date for this is 06 October.
Reason for the withdrawal is given different at different sources. Some of these are:
Recent developments relating to Dhanus Technologies (Dhanus) — a company which made a recent initial public offering—may affect investor sentiment towards the stock on listing and lower chances of any potential listing gain. A company statement on Thursday, has drawn attention to issues relating to seizure of calling cards from its premises and CBI raids and subsequent recovery of cash and property documents from its Managing Director. Pursuant to this, the company has provided for time until October 6 2007, allowing investors including institutional bidders to withdraw their IPO applications.
Unattractive offer
In any case, the offer appeared unattractive purely from a business point of view. International calling cards, fleet tracking devices and IT/BPO are the key business segments for the company. With heavy competition from established players in its calling cards division, the relatively small market for fleet tracking in India and less than promising prospects for it's IT and BPO divisions, there are uncertainties about the company's ability to deliver sustainable growth. Now, recent developments indicate that there could also be governance issues with respect to the company. In light of this, the exit window provides retail investors an option to exit from this offer.
(Source: Hindu Business Line)
Company said in the statement, "The company denies having obtained any personal loans in the name of its employees without their knowledge and/or by forging their signatures. We wish to clarify that neither our company nor any of our promoters/directors/employees are in any way involved in any of the alleged frauds or forgery mentioned in said article. Individual intimation letters regarding this public notice have been dispatched to all the applicants and the dispatch as been completed on September 26, 2007".
Earlier, a few newspapers had reported about alleged fraud by the management and applications for personal loans, done by the management, on behalf of the employees without their knowledge.
Sebi has guided the company to come out with an option of giving a window to the investors to move out if they want to. They feel that the information given is not enough to alert the investors. So, it is a statutory provision, which has been asked by Sebi, and they are following it.
(Source Moneycontrol)
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