Rolta says biz in order as shares plunge

13 Jan 2009, 1824 hrs IST, REUTERS
MUMBAI: Rolta India Ltd on Tuesday said all its businesses and operations were in order in a clarification issued after the software service provider's shares crashed nearly 60 percent to a 3-½ year low.

"The company categorically states that all its operations and business are in order and there are no new developments which have taken place that have any material impact on the company's operations," the company said in a statement to stock exchanges.

Shares had crashed on speculation stocks pledged by promoters have been sold by creditors, which was denied by Chairman Kamal Singh on television.

There was also speculation that foreign funds had sold stake in the software firm, which could not be confirmed immediately. As of December-end, foreign institutional investors held 35.3 percent in Rolta, according to data with the BSE.

"They have not informed us of anything," Chairman and Managing Director Kamal Singh told a news channel when asked if any foreign funds had informed him of a share sale.

Rolta Shares & Stocks Pvt has a 2.6-percent stake in Rolta which are pledged to meet its working capital needs, Singh said. However the banks with whom the shares are pledged have not sold these shares, he added.

"We have reconfirmed from all the bankers," said Singh, naming Axis Bank, Union Bank of India and Indian Bank as creditors. "They have all confirmed nothing has been sold."

"Question of selling doesn't arise because we have not drawn any substantial money against these shares," Singh, who is also the company's managing director, said. "Right now nothing has been used out of them. Nothing has been sold out of them."

Rolta shares, which dropped to a 3-½ year low of 42.40 rupees on the speculation, quicky recouped some of its losses on the clarification but still closed 17.7 percent lower at 87.15 rupees in a weak Mumbai market.

Rolta's board is scheduled to meet on Jan. 19 to consider the company's results for the quarter-ended December.