Shares in developer DB Realty hit a record low on Monday after its Managing Director Shahid Balwa, embroiled in a widening telecom corruption investigation, resigned from his position. The Mumbai-based company’s shares opened 15 percent lower at 100 rupees, after DB said its board had accepted Balwa’s resignation with effect from Feb. 9, in view of his preoccupations relating to 2G spectrum investigations.
The stock recovered partially, but still ended 3.74 percent lower. Shares in the company, which went public in February 2010, are down 42 percent so far this year, and are less than a fourth of their listing price of Rs. 468.
“The management is preoccupied with getting Balwa released. Day-to-day decision-making seems to have gone for a toss,” said a sector analyst at a Mumbai brokerage, who declined to be named as he no longer had the company under active coverage.
“One can’t say at what level the stock will settle, because there’s no real buying interest,” said another trade analyst.
Balwa was the first company executive arrested in a multi-billion dollar telecoms corruption scandal that has rocked the UPA government and undermined Prime Minister Manmohan Singh.
The investigation into telecoms license awards that may have cost the government as much as $39 billion in lost revenue has led to other arrests, seen members of India’s corporate elite questioned by authorities, and battered telecom stocks.
Balwa, also vice chairman of Etisalat’s Indian joint venture, was arrested in February after his firm was accused of being among two firms that were given undue preference in licence grants in 2008.
DB Realty, which is focused on building high-end apartments in India’s financial capital, had earlier said Balwa has been “wrongly implicated” and the company will be strongly contesting the proceedings.
