Corruption Scandals continue to hit Indian Stocks – DB Realty,Sun TV,Spice Jet

These 3 Indian companies DB Realty,Sun TV,Spice Jet have very little to relate to each other.One is a real estate company,one is one of the fastest growing media companies while the third one is one of the biggest low cost airlines in which Wilbur Ross was an investor.The common thread running through these companies is their association with a regional political party in India at the center of a massive billion dollar telecom scam in India.The leader of this party Raja was recently sacked from his post as the telecom minister and has now earned the dubious distinction of becoming the first minister to get jail time from his own government.Corruption Scandals have ruled the roost in the last 6 months frequently leading to huge stock price drops.Small Cap,Mid cap scandals,insider trading,bribery rings have all been documented by this blog which  led to huge losses for investors.

The Dangers of investing in Indian markets is underestimated and even reputed firms can come under fire.DB Realty one of the real estate companies to IPO in the last year has been accused of paying a massive bribe of Rs 204 crore ($45 million) to Kalaignar TV (owner of the Sun TV company) which was subsequently used to buy a stake in Spice Jet.Note the Marans who are the owners of the Sun TV network are close blood relations of the DMK party.DB Realty are the promoters of a telecom company which won a license in the second 2G auction.Does not take a rocket scientist to figure out why the money flowed.

SpiceJet, Sun TV fall on CBI probe talk

Shares of SpiceJet and Sun TV Network fell on market talk that Sun founder Kalanithi Maran’s deal of buying a stake in SpiceJet was under investigation by the Central Bureau of Investigation (CBI), four dealers said.The CBI investigating the telecom scam has arrested a former minister from the political party headed by Maran’s relative. When contacted by Reuters, a CBI official chose not to talk about the SpiceJet transaction, but said the telecoms graft investigations are “leading in all directions.” A SpiceJet spokeswoman declined comment.

Shares of both the companies had fallen 7-13 percent on Friday

2G scam: DB Realty shares down on CBI probe report

Shares of DB Realty was trading lower after Economic Times reported that investigating agencies probing the alleged irregularity in allocation of 2G licences are examining a transaction in which over Rs 200 crore was transferred from Mumbai-based DB group to Kalaignar TV, a broadcaster majority-owned by family members of DMK party chief M Karunanidhi . Officers from investigating agencies are interested in the deal because the telecom arm of DB Realty figures among the companies that bagged 2G licences in 2008. A Raja, the controversial former telecom minister and a leading light of the DMK who was arrested by the Central Bureau of Investigation (CBI) on Wednesday, was in charge when the licences were handed out, allegedly at below-market prices.