The shares of KEC International dropped more than 7 percent on November 19 after Power Grid debarred the firm from participating in its new tenders and being awarded contracts for a period of nine months.
The stock was trading in the red at Rs 724.70 apiece in the morning trading hours of Wednesday, snapping a two-day gaining streak.
'Alleged transgression of contractual provisions':
In an exchange filing released in the post-market hours of November 18, KEC International said that the Power Grid Corporation of India debarred the company from taking fresh tenders or contracts due to "alleged transgression of contractual provisions".
The company explained that this was in relation to an event already disclosed to exchanges earlier in March. On March 24, it said that exchanges have sought clarification with respect to a news article captioned 'CBI Arrests Power Grid Corporation GM & KEC International Executives in Rs. 2.5 Lakh Bribery Scandal'.
What CBI had said:
The CBI had said that it has received information that Power Grid Senior General Manager Uday Kumar and several executives of KEC International participated in the giving and taking of undue favours to process and pass bills related to Power Grid's contracts awarded to KEC International.
'Exclusion won't affect any of KEC's existing projects from Power Grid':
In the latest exchange filing, KEC International announced that the said exclusion will not affect any of its existing projects from Power Grid which are under execution. "The Company is examining various options available to it including legal recourse/approaching PGCIL for reconsideration of the above," it said.
KEC International added that it does not expect any significant impact on its operations and financial position, considering its strong order book and tender pipeline. “KEC International Limited upholds the highest standards of corporate governance, ethics, and compliance in all its operations and conducts its business with integrity, transparency, and adherence to applicable laws and regulations,” it said.
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