Edelweiss Financial shares down 10% on report of summon to chairman Rashesh Shah

Shares of Edelweiss Financial plunged 10 per cent on media reports that group founder and chairman Rashesh Shah has been summoned by the Enforcement Directorate (ED) on Friday in connection to a Rs 2,000 crore forex scam. The scrip of Edelweiss Financial Services Limited was trading at 105.50, down 11.70, or 9.98 per cent on BSE at the time of reporting. However, the company termed the reports false and baseless. The company is expected to issue a response on the matter to the stock exchanges soon.

Rashesh Shah is the chairman and chief executive officer (CEO) of the Edelweiss Group. He is also the co-founder of Edelweiss Financial Services. Rashesh Shah writes and delivers lectures on topics related to financial markets, development, macroeconomic policies, and related matters.

In Q2,  Edelweiss Financial Services reported nearly 50 per cent fall in its consolidated net profit at Rs 134.49 crore for the first quarter ended June 30, 2019. In the corresponding April-June quarter of previous fiscal, the company’s net profit was at Rs 263.32 crore. The total consolidated income increased to Rs 2,545.93 crore in the three months to June of FY20, as against Rs 2,476.14 crore in the year ago period.

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The firm’s retail credit book was at Rs 16,981 crore and corporate credit book stood at Rs 16,987 crore at the end of first quarter of this fiscal. The company’s total credit book including distressed credit stood at Rs 42,599 crore at June end. The gross non-performing assets (NPAs) stood at 2.33 per cent and net NPAs at 1.24 per cent.

Meanwhile, the equity benchmarks — Sensex and Nifty — ended on a positive note despite falling from the day’s high on easing situation in the Middle East.