Stock manipulation: Atlas Jewellery India
9 March 2015
After a sharp rise of more than 1970%, the stock price of Atlas Jewellery crashed by over 50%. Sebi is sleeping as usual
Atlas Jewellery India (Atlas) took over Gee El Woollens on 31 July 2013. After the current promoters acquired the controlling interest, the company’s name was changed. The present promoters, having an established jewellery business, started buying into Gee El Woollens since 2006. Was the takeover fair? Between 2006 and 2011, the company did not make any disclosure in compliance of the takeover regulations. The market regulator fined Atlas only Rs3 lakh for not complying with the regulations. Atlas effectively started its export business operations in January 2014. From February 2013 to October 2014, the stock price of Atlas shot up by around 350%, to Rs45 from around Rs10. This was not all. In a span of two months, the price shot up another 360% and peaked to Rs207 on 8 December 2014, from Rs45 on 1 October 2014, constantly hitting the upper circuit. The trend reversed soon. Just after hitting the peak, the stock price started falling sharply, constantly being locked in the lower circuit. The price crashed by 52%, to Rs100 on 18 February 2015. The exchanges and the regulator cannot see a clear case of market manipulation.