Why DHFL share rallied 11% after its CEO Harshil Mehta resigned?
DHFL shares surged over 11 per cent to rebound from losses in early morning deals which came on the heels of Wednesday's announcement that its chief executive Harshil Mehta had resigned due to his engagement with other assignments.
Dewan Housing Finance Corporation (DHFL) shares rebounded smartly in late morning deals on Thursday after slipping nearly 6 per cent in intra-day trade, a day after the company said that its chief executive Harshil Mehta had resigned due to his engagement with other assignments.
"Due to full-time engagement with other assignments within the company, Harshil Mehta has expressed his desire to resign from the position of Whole Time Director (designated as Joint Managing Director and CEO) from the board of directors of the company with immediate effect," DHFL said in a filing to the Bombay Stock Exchange.
Reacting to the news, shares of the housing finance company declined as much as 5.92 per cent to touch and an intra-day low of Rs 104 apiece on the Bombay Stock Exchange.
However, the company witnessed sharp buying in late morning deals and gained as much as 11.21 per cent to touch an intra-day high of Rs 122.95.
In a similar trend, shares of the non-banking financial company surged as much as 10.30 per cent to 122.65 level compared to the previous close of Rs 111.20 on the National Stock Exchange.
DHFL said the board accepted Mehta's resignation with effect from February 13, 2019. However, he would continue to be associated with the company and shall hold the designation of Executive President - Retail Business with effect from February 14, 2019.
In a separate development, the board of the company announced the appointment of Sunjoy Joshi as an Independent Director and Srinath Sridharan as a Non-Executive Director of the Company, subjected to approvals from the regulatory authorities.
Last month, investigative news portal Cobrapost has claimed that the primary promoters of DHFL siphoned off more than Rs 31,000 crore of public money in one of the biggest financial scams ever. The alleged scam was pulled off through grants of loans and advances to shell companies. Money was also allegedly routed through dubious companies and parked outside India to acquire assets.
DHFL had dismissed Cobrapost's allegations, terming it as "mischievous misadventure" done with a mala fide intent.
Meanwhile, the 30-share barometer Sensex was trading below the 36,000 mark at 35,867.85, down 166.26 points, or 0.46 per cent.
Ediied by Chitranjan Kumar