Curious case of Raghav Bahl’s newly acquired Gaurav Mercantiles

New Delhi, July 10 (IANS) Share price of Gaurav Mercantiles has been heating up ever since media baron Raghav Bahl along with wife Ritu Kapur acquired majority stake in it.

The disclosure that the ship-breaking firm would get into media and entertainment by buying a firm of its own promoter group has added to the rally. Its share rose 52-week high of Rs 151 a piece on the BSE on Tuesday. It slipped marginally on Wednesday settling 1.99 per cent down to Rs 148 a piece.

The Midas touch by Bahl family has put Gaurav Mercantiles into a high orbit.

The Board of Directors of Gaurav Mercantiles would next week consider a proposal to buy Bahl's news website 'The Quint'.

In a recent communication, Gaurav Mercantiles said that the Board of Directors of the company in its scheduled meeting on July 17 would consider "the preliminary proposal in relation to acquisition of digital content business of Quintillion Media Private Limited -- operated under the name and style of the Quint (www.thequint.com)."

Gaurav Mercantiles had earlier this year come under scanner for unusual rise in its share price after Bahl acquired it but the firm had said it cannot comment on the price movement.

"As you are aware, an open offer for shares of the company has been made by a highly reputed acquirer and the processing of the open offer by SEBI is set out in the status document on the SEBI website. Perhaps there is interest in the shares on this basis. We are unable to think of anything else for comment," Gaurav Mercantiles Ltd (GML) had written on March 13, 2019 in response to a letter from BSE on the issue.

Raghav Bahl and wife Ritu Kapur holds 66.4 per cent stake in Gaurav Mercantiles.

Gaurav Mercantiles, however, does not consider the unusual rise in share price as surprising given that its new business strategy has been in place for some months now. This and other necessary disclosures have also been made to the BSE as per the listing guidelines, as per a company executive.A

"Firstly, the Board of Directors of the Gaurav Mercantiles Limited vide the press release dated February 26, 2019 duly disclosed the intent of the Company to foray into Media and Entertainment Industry," said compliance officer of GML.

She further said that the shareholders of the company vide the postal ballot dated May 12, 2019 had approved the amendment of the object clause of the Memorandum of Association to undertake a new line of business in the media and entertainment industry.

Additionally, as part of the said postal ballot, the shareholders also approved raising of fresh capital amounting to Rs 70 crore from the promoters and reputed identified investors including Mauritius-based Vespera Fund Ltd, a Category II foreign portfolio investor (FPI) to fund the proposed foray.

"Lastly, the Board of Directors of the Company on May 25, 2019 duly completed the issuance of fresh securities to the promoters and reputed identified investors," the Comliance officer said in an email.

Raghav Bahl who earlier sold his TV ventures to Reliance Industries has been in news in recent months for wrong reasons. The tax department and some of the central investigation agencies have sought responses from him in the alleged case of tax evasion and alleged financial bungling.

The Income Tax department (I-T) had last year raided Raghav Bahl's residence and office in an alleged case of tax evasion.

Following this, Bahl had issued an official statement and said that he was astonished to see that a blatant attempt had been made by the "government's spin-masters" to say that the action was part of a year-long investigation into some Long-Term Capital Gains (LTCG) scam, whereby Raghav Bahl and Ritu Kapur had made "bogus" income of Rs 118 crore.