Shares of Mishtann Foods Ltd. plummeted around 20% to hit their lower circuit in early trade on Friday, after the company issued a clarification on the show cause notice issued by capital markets regulator SEBI.
The management of Mishtann Foods has strongly denied all allegations mentioned in the show cause order, which contained allegations of financial mismanagement and fraudulent transactions. The company claims that the allegations are based on assumptions, lacking credibility, and disconnected from reality, as per an exchange filing.
On Thursday, SEBI imposed a ban on five entities, including Mishtann Foods and its promoter and Chairman & Managing Director, Hiteshkumar Gaurishankar Patel, from accessing the securities markets until further notice. The ban followed the aforementioned allegations.
The regulator's investigation revealed that MFL had negligible fixed assets, negative cash flow from its operations, and unusually low inventory compared to its significant sales figures during the investigation period. These irregularities were found to be likely fictitious and involved circular flow of funds.
Mishtann Foods Share Price Today
Mishtann Foods share price fell as much as 19.97% to 12.42 apiece, and is stuck in the 20% lower circuit as of 09:53 a.m. This compares to a 0.05% advance in the BSE Sensex.
It has fallen 25% on a year-to-date basis. Total traded volume so far in the day stood at 9.7 times its 30-day average. The relative strength index was at 34.34.
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