Syndicate Bank shares slump over 8% after chairman's arrest

Shares of Syndicate Bank on Monday plunged over 8 per cent after the Central Bureau of Investigation arrested its chairman and managing director S K Jain (bottom, left) for allegedly taking bribe of Rs 50 lakh for increasing credit limit of some companies.

Syndicate Bank's scrip slumped 8.57 per cent to Rs 132.25 on the BSE.

At the NSE, it tumbled 8.45 per cent to Rs 132.10.

Led by the sharp fall in the stock, the company's market value fell by Rs 961.85 crore to Rs 8,078.17 crore (Rs 80.78 billion).

Shares of Bhushan Steel and Prakash Industries also took a severe beating, plunging 9 per cent and 19.96 per cent, respectively on the BSE.

Jain and seven others were on Sunday remanded in CBI custody for four days as the agency plans to probe various other angles into the case that may emerge from the telephonic transcripts of the official and conduits.

The CBI placed Jain and seven others -- chairman and managing director of Prakash Industries Ved Prakash Agarwal and director Vipul Agarwal, chartered accountant Pawan Bansal, Vineet and Puneet Godha (relatives of Jain), Vijay Pahuja and Pankaj Bansal under arrest.

Jain was arrested by the CBI on Saturday for allegedly negotiating with Bhushan Steel for an illegal gratification of Rs 50 lakh (Rs 5 million) in return for granting credit extension to that company as it had defaulted on the payment of loan instalments amounting to crores of rupees to the bank.

CBI has registered two cases against Jain and 11 others including CMD and directors of two private firms based at Delhi -- Bhushan Steel and Prakash Industries -- in a bribery case under relevant sections of Prevention of Corruption Act, 1988 and criminal conspiracy.