The Securities and Exchange Commission (SEC) is collecting facts about the investments and dealings of Environment Resources Investments (ERI - formerly Walker & Greg) to verify whether there has been any market manipulation when its shares were traded during the recent weeks, according to informed sources.
“Presently they (SEC) are collecting facts relating to the increases in the ERI share price and also SEC is having some concerns about some of their disclosures – especially with regard to their (foreign) investment in South Africa (platinum mine),” a source said.
ERI shares and its warrants together with connected companies were the main market movers during the past few weeks, with two differering views by the traders on this share. Some say there’s future value in the firm, whereas some others are quite conservative.
“As long as the shares are not ‘deliberately’ manipulated or mercilessly punted speculatively by short term players, there shouldn’t be any issue,” a share analyst said. Last August the company said that of ERI’s assets, 52% is in Eastern Platinum, a company situated in South Africa and quoted in the Toronto exchange, but the analyst said that the profits of this mining firm are not available to make an informed decision.
“We are not experts of the mining industry, which prevents some investors from purchasing this share,” he noted.
A source close to ERI, who did not wish to be named, confirmed that the regulator is ‘probing ERI share transactions of some stock broking firms’, and not the company.
“ERI has issued rights and warrants together, which is the main reason that the company sees why its share price is zooming,” he said. He also added that ‘some (jealous) stockbrokers are pressurizing the regulators for missing the bus’.
On foreign investment, he said: “If a firm pays for the platinum mine by raising a rights issue, there’s nothing wrong with it.”
He said ERI has invested in firms that are not doing well or those which are sick and turned them around. “One good example is Ceylon Leather Products, which is a success story,” he added.
An analyst who said that there is future value in ERI noted the share has become the envy of all snobbish blue chips.
Another analyst noted that one reason for ERI’s share price escalation is that its public float is small. The net asset value of the share is at Rs 30. |
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