PC Jeweller Denies CEO Arrest

RAPAPORT... PC Jeweller has denied a report that its CEO has beenarrested, but scrutiny of the Indian retailer has intensified amid a slump in itsshare price. Business Television India (BTVI) reported Thursday thatIndia's Central Bureau of Investigation had detained Balram Garg, the jeweler'sCEO, as part of a probe into his dealings with politicians. It also alleged aconnection between Garg and Mehul Choksi, the managing director of GitanjaliGems, which is under investigation over bank fraud. However, that report was incorrect, Sanjeev Bhatia, PCJeweller's chief financial officer, said in a statement later Thursday. Garghas already appeared on television for a live interview to clarify thesituation since the report emerged, Bhatia noted. Bhatia also described the arrest claim as a "damaging rumor"in a separate interview on BTVI. Delhi-based PC Jeweller's stock has plummeted 76% since the beginningof the year, with a 62% drop since last Tuesday. Shares fell 9% in earlytrading Thursday, but recovered following the company's reassurances, endingthe day 10% higher than they started. Possible reasons for the slump included reports of links toVakrangee, a service provider that the Securities and Exchange Board of India hasbeen investigating for alleged stock manipulation, according to Business Today.In addition, PC Jewellers chairman Padam Chand Gupta has given away some of hisstock to family members, raising investors' concerns that he would continue tooffload shares, the magazine added. "We do not find any justification or reason behind [the]decrease in [the] price of equity shares of the company today," Bhatia added inhis statement. "We would like to assure our investors, shareholders and otherstakeholders that there is nothing wrong with the company and its operations,the fundamentals of the company remain strong, and it continues to move ahead on[a] growth path." Image: PCJeweller/Facebook