Jyoti CNC Automation is down 14.31% in today’s trade. The stock reacted to the announcement by Jyoti CNC that it is facing a regulatory probe in France involving its subsidiary, Huron Graffenstaden SAS.
The probe by French authorities is linked to alleged violations of European Union export control laws involving the export of machines classified as dual-use technology. Certain of its employees of the subsidiary have also been questioned as part of the investigation.
“Over this week, certain relevant authorities for our material subsidiary Huron Graffenstaden SAS had initiated investigation against Huron Graffenstaden SAS and certain of its employees where such employees had been interviewed by French authorities regarding export controls and export-documentation of machinery considered to be of dual-use,” Jyoti CNC Automation stated in its regulatory filing.
Assets seized, director general restricted
As part of interim measures, authorities have temporarily barred the Director General of Huron Graffenstaden SAS from discharging duties. They have also seized certain bank accounts of the subsidiary amounting to around 4 million euro.
In addition, two residential properties owned by Jyoti SAS have been seized. A formal judicial investigation has now been launched against the subsidiary and some of its employees.
Company denies allegations, to contest case
Huron Graffenstaden SAS has refuted the allegations and is seeking legal advice. The company said it will strongly contest the matter and is working to get more clarity from the authorities.
No immediate impact on business operations
Jyoti CNC said that despite the developments, the current business operations of Huron Graffenstaden SAS continue as usual. “At this juncture, our Company believes that while the assets being seized and the services of certain employees who are part of the investigation may not be available to the Group for the time being, the current business and operations of Huron Graffenstaden SAS remain as usual. Some assets, which are services of employees involved in the investigation, may not be available for the time being,” said Jyoti CNC.
The company added that the action does not expect any immediate adverse impact on its overall business operations, as over 85% of the group’s revenue comes from its standalone operations.
