am in the process of starting an association called Society of Essar Victims. WHy ? I was one myself.
I subscribed to Essar Gujarat & later their rights issue at a stiff premium then - 1987/89. Essar quietly swallowed public money when markets were good but year after year reported losses. They reported sick & later asked financial institutions and banks for interest waiver and loan restructure. For the shareholders they cut share capital by 40%. Yes 40% !!! My 1000 shares in Essar Gujarat , now named Essar Steel became 600. Share was below Rs. 10 for some years. Now after the steel prices went up and up for the past few years they have made money steadily enough to wipe out losses and minting large profits. But now that they have large profits there is a sudden unwillingness to share with the public who faithfully supported them in the bad times. Now Essar Steel wants to delist since the management had quietly accumulated 87% in the past few years at a much cheaper price (actually this is insider trading is SEBI aware ) and want to corner ENTIRE shareholding.
Essar Philosophy - TAKE MONEY FROM PUBLIC DURING BAD TIMES & CORNER THE SHARES WHEN IT BECOMES PROFITABLE. To start the association will be a long exercise but we need to make the effort. Those with feedback and suggestions pls mail me at stazz229@rediffmail.com
ASSOCIATION OBJECT - BOYCOTT ALL ESSAR PRODUCTS. BLACKLIST THEM FROM MARKET. DO NOT SUBSCRIBE TO THEIR IPOs.
RE:Association of Essar victims
by sunny on Dec 05, 2007 01:40 PM Permalink
Your story makes me think of the following story!!!
Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for Rs. 10/-
The villagers seeing that there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at Rs. 10/- and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at Rs. 20/- This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to Rs. 25/- and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at Rs50! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.
In the absence of the man, the assistant told the villagers. Look at all these monkeys in the big cage that the man has collected. I will sell them to you at Rs35 and when the man returns from the city, you can sell it to him for Rs. 50/-
The villagers squeezed up with all their savings and bought all the monkeys.
Then they never saw the man nor his assistant, only monkeys everywhere!!!
Thank you for this anecdote. It was funny but very rich in the message. Yes, you are right. As investors we have been made fools. And I know I should accept this.
But my issue is not my loss. Today I happen to be in a much better situation , inasmuch to say that investing in stocks and getting the right returns is not a problem for me at all. I have grown through the growth curve and thus the learning curve as well. Now I wish to highlight this to other investors so that they may not be milked. Remember, some of them will be in starting point of their careers and this money will be very big for them. They will be hit harder. My wish is to prevent them from going in for such companies.
And I happy to say that replies to this message is pouring in. I have posting this message wherever I can so that it spreads amongst the maximum number of readers.
I also earnestly request readers to spread to their circle in turn - friends, relatives, etc.
It may not stop Essar from milking public but finally SEBI may wake up and start looking at this business practice. After it was set up for investor protection. Finally it may perform the role for which it was set up !!
RE:Association of Essar victims
by PRAMOD GAYAKWAD on Dec 06, 2007 09:12 AM Permalink
Thanks for such information. I would like to see such info in future wrt other companies as well.
Is to completely avoid mutual funds. Although returns are good,still it does not reflect the trend in the stock market.Investing in good scrips offer better returns then mutual funds.Invest in under valued stock for long term and invest in momemtum stocks for short term. I have made almost 300 percent in a year,,and i dont think any mutual funds had offered the returns as much. Buy the best companies in each sectors.Thats the secret.
RE:my advice
by Vikas Vadgama on Dec 07, 2007 02:32 PM Permalink
Just like all fingers are not same, like all people are not as intelligent as you. Hence, existence of Mutual Funds.
