Coal India down 2% on audit demand by shareholder
Coal India shares are down around 2 percent to Rs 297.50 on media reports that a minority shareholder in the company has written to the Prime Minister‘s Office (PMO) seeking an audit by the Comptroller Auditor General (CAG) for fuel supply agreements (FSAs) signed between the miner and its customers.
March 19, 2013 / 11:32 IST
Moneycontrol Bureau
Coal India shares are down around 2 percent to Rs 297.50 on media reports that a minority shareholder in the company has written to the Prime Minister's Office (PMO) seeking an audit by the Comptroller Auditor General (CAG) on fuel supply agreements (FSAs) signed between the miner and its customers.A Hindu Business Line report suggests that TCI, a UK-based shareholder, has alleged that the FSA system creates large scale corruption as companies are incentivised to pay bribes in order to obtain coal at up to 70 per cent discount to international market prices.Simultaneously, the on-going tussle between CIL and its customers (power producers) on quality and pricing of coal has also not gone down well with investors.The stock has fallen around 23 percent from its 52 week high of Rs 386 on September 17 due to various reasons like the company's inability to raise prices despite surge in raw material cost.Also, the company's April-Feb production has dropped to 398 metric tonnes versus 413.7 mt year-on-year. It may have to import 20 mt to avoid penalties, incase there is a short supply.Read This: Five reasons why Coal India stock is down Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
