Charu is a CA in Prakash Ltd. During the course of meeting with directors, she came to know that as against the previous years, this year the company is going to declare handsome dividend offer. It is observed that when such news becomes public then the share-market jumps up. Considering it, Charu purchased a large number of company's shares before this news reached the public. Identify the type of malpractice by Charu.

Price rigging

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Price adulteration

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Price factoring

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None of the above

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Solution

The correct option is A
Price rigging

Price Rigging is an illegal action that occurs when parties conspire to fix or inflate prices to achieve higher profits at the expense of the consumer.

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Charu is a CA in Prakash Ltd. During the course of meeting with directors, she came to know that as against the previous years, this year the company is going to declare handsome dividend offer. It is observed that when such news becomes public then the share-market jumps up. Considering it, Charu purchased a large number of company's shares before this news reached the public. Name the authority which regulates such behaviour.

An auto company C Ltd., is facing a problem of declining market share due to increased competition from other new and existing players in the market. Its competitors are introducing lower-priced models for mass consumers who are price sensitive. For quality conscious consumers, the company is introducing new models with added features and new technological advancements.

Identify the limitations of such plans.

The directors of a company want to modernise its plant and machinery by making a public issue of shares. They wish to approach stock exchange, while the finance manager prefers to approach a consultant for a new public issue of shares. Advise the directors whether to approach stock exchange or a consultant for new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.

A share broker keeps complete knowledge about share market conditions. The directors of a company take his help to make a fresh issue of the proposed company. Later on, it was found that the share broker himself has brought a maximum number of shares of the company through unfair means with an objective of doing price rigging.

(i) Which market did the share broker work in and represented what possible institutions to make fresh issues for the company?

(ii) What are the unfair means undertaken by the share broker called? What does it mean?

(iii) Which regulatory body can protect investors and punish the share broker from this unfair means?

Q. The Directors of a Company want to modernise its plants and machinery by making a public issue of shares. They wish to approach stock exchange. While the finance manager prefers to approach a consultant for the new public issue of shares. Advise the directors whether to approach stock exchange or consultant for the new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.

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The correct option is A Price rigging Price Rigging is an illegal action that occurs when parties conspire to fix or inflate prices to achieve higher profits at the expense of the consumer.

The correct option is A
Price rigging

Price Rigging is an illegal action that occurs when parties conspire to fix or inflate prices to achieve higher profits at the expense of the consumer.