Mumbai, April 13: Shares of Jyoti CNC Automation fell sharply on Monday, amidst news that its French subsidiary is facing an intense investigation. The stock dropped 15.5 per cent during the trading day, hitting an intra-day low of Rs 692 on the Bombay Stock Exchange (BSE).
The dramatic slide came after the company disclosed that its French entity, Huron Graffenstaden SAS, is currently under scrutiny by French authorities. While the stock later showed a slight recovery, trading at 13.59 per cent lower at Rs 707.9 during the noon trade.
Scope of French Investigation and Charges
The investigation initiated by the French authorities relates to alleged violations of European Union export control laws. Specifically, the probe concerns "dual-use" machinery, equipment that holds the potential for both civilian and military applications.According to the company's regulatory filing, relevant authorities launched the inquiry after interviewing certain employees at Huron Graffenstaden SAS. The focus of the investigation has been on export controls and the required documentation for the dual-use machinery.
The inquiry itself was launched by France’s National Directorate of Intelligence and Customs Investigations. As an interim measure, the director general of the French subsidiary has been temporarily prevented from carrying out official duties.
Immediate Operational and Financial Impact
The legal action has resulted in significant seizures and restrictions. Authorities have seized bank accounts valued at around €4 million. Furthermore, two residential properties belonging to Jyoti SAS were placed under interim seizure by the authorities.A formal judicial investigation has been launched against the subsidiary itself, alongside several of its key employees.
Despite these developments, Huron Graffenstaden SAS has formally denied all allegations. The subsidiary stated that it is currently seeking legal counsel to challenge the actions taken by the authorities and is working to gain more clarity on the matter.
Company's Assessment and Outlook
In its regulatory filing, Jyoti CNC reiterated that the current operations of the French subsidiary remain unaffected for the immediate future. The company also stated that the developments are not expected to have any adverse impact on the standalone business segment, which contributes more than 85 per cent of the group’s total revenue.However, the Rajkot-based manufacturer added a note of caution. It confirmed that it is still actively assessing the potential financial impact of these developments, particularly beyond the assets that have already been seized.
Founded in 1989, Jyoti CNC Automation is recognized as a premier manufacturer of CNC machines in India. Its diverse product portfolio includes turning centres, machining centres, five-axis machines, and advanced solutions powered by Industry 4.0 and artificial intelligence.
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