Indian jeweler, that saw its market worth reach $3.6 billion at the start of the year is now floundering at about a quarter of that value after one of its founders gifted some shares to family members, raising concern about the company’s governance.
PC Jeweller Ltd. slumped by about half after the company said last week that one of its founders P.C. Gupta made the gifts through off-market transactions.
PC Jeweller has suffered once before this year after Vakrangee Limited., which had been a shareholder, was reported to be under regulatory investigation.
Vakrangee said at the time that it hadn’t received any official communication from the regulator.
In response to questions from investors, the company said in the April 25 filing that it wasn’t aware of any reason for the sudden plunge that day in the stock’s price. It denied that any founders had sold shares on the market, but revealed Gupta had made the gift of an undisclosed number to “his family member.”
The stock has plunged 75 percent from a record on Jan. 19, taking its market capitalization to 58.3 billion rupees ($873 million). It climbed 21 percent to 146.85 rupees as of 12:31 p.m. in Mumbai on Friday.
Jewelers in India are having a tough year. The industry has come under a cloud with two companies under investigation for an alleged banking fraud of $2 billion.