Bharat Financial Falls Most in 10 Months as President Arrestedby
S Dilli Raj arrested by financial-crimes investigators
Shares still higher than analysts’ consensus target price
Bharat Financial Inclusion Ltd., the Indian microfinance company formerly known as SKS Microfinance Ltd., slumped the most since September in Mumbai stock trading after financial-crimes investigators arrested its president.
The company’s shares fell as much as 10 percent, the biggest intraday drop since Sept. 18, before paring its loss to 8.5 percent at 833.10 rupees as of 2:11 p.m. local time. After almost tripling in the past two years, it’s still trading higher than the 12-month consensus analyst target price of 809.15 rupees, data compiled by Bloomberg show.
The Enforcement Directorate, a federal body that probes financial crimes, arrested Bharat Financial President S Dilli Raj in relation to an ongoing investigation into a complaint filed by IDBI Bank Ltd. against First Leasing Company of India, his former employer, Bharat Financial said in an exchange filing on Monday.
The filing didn’t specify what Raj was arrested for or give any details of IDBI’s complaint, but did include comments from a statement that Bharat Financial said its president made in October.
In that statement, Raj said he had resigned from First Leasing in November 2007 and that the company had already repaid all loans it took during his tenure, according to Bharat Financial. IDBI Bank’s complaint relates to loans approved in 2012 and 2013, Bharat Financial said.
The investigation into IDBI Bank’s complaint “does not in any way relate” to Bharat Financial, the micro-credit company said. J.S. Sai, a Hyderabad-based spokesman for the firm, declined to comment immediately on the impact of the arrest on day-to-day operations.