Deep Industries shares plunge deep into the red

Shares of Deep Industries Limited tanked 20% to hit the lower circuit Monday morning, reeling under pressure after the Central Bureau of Investigation booked officials of Oil and Natural Gas Corporation in the Rs 800 million scam case.

The stock plunged to a near three-year low of Rs 107.15, after opening at Rs 128, nearly 5% down from its previous closing price. On BSE, about 85,000 shares changed hands at the Deep Industries counter this morning, nearly 8 times the average daily volume of about 11,000 shares.

On the National Stock Exchange, the Deep Industries counter clocked a volume of 7.05 lakh shares. The stock was trading around Rs 317 a year ago. .

According to a filing from Deep Industries to the stock exchanges, the investigating agency has booked 13 senior serving and retired officials of ONGC, Rajamundry, based on a complaint filed by the Vigilance Department of ONGC.

The charge relates to alleged irregularities in giving a contract to Deep Industries for supplying gas dehydration units for its Rajahmundry plant in Andhra Pradesh.

A former executive director of ONGC DG Sanyal, Onshore director Ashok Verma and ex-DGM (Production) Arup Ratan Das are among the officials named in the FIR. They have been accused of abusing their official position in giving a contract worth Rs 312 crore to Deep Industries Ltd, for supplying gas dehydration units, causing a loss of Rs 80 crore to ONGC, according to charges filed by the CBI.

The contract was awarded to Deep Industries by overlooking the guidelines of the public sector undertaking and the fact that the company was ineligible due to technical deficiencies, the agency says in its chargesheet. It is alleged that the officials made working papers for hiring and owning of the GDUs and prepared the estimates on a single quotation as against the requirement of three budgetary quotations.

The agency claimed that the only budgetary quotation was from Deep Industries of Rs 219 crore for hiring of the GDUs for three years and that the company raised the costs to Rs 312 crores on false grounds.

Deep Industries has stated that the company has filed writ petitions with Hon. High Court of judicature at Hyderabad. The company added that it is committed towards co-operating with investigation agencies and is confident of getting due justice.

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