Balwa: Exit mode

Mumbai, March 7: Nearly a month after he was arrested by the Central Bureau of Investigation (CBI) in connection with the 2G spectrum scam, Shahid Usman Balwa, the copromoter of DB Realty, has resigned as the managing director of the Rs 951-crore real estate company.

In a statement to the stock exchanges, DB Realty said its board of directors held a meeting on March 5 and accepted Balwa’s resignation.

It went on to add that the resignation had been accepted with effect from February 9 in view of his “preoccupations relating to certain investigations’’.

The company said Vinod Goenka, managing director, would continue to steer the company.

The announcement sent DB Realty shares tumbling to a new low in intra-day trades. On the BSE, the scrip slumped to Rs 100 from its previous close of Rs 117.65, a drop of nearly 18 per cent. The share, however, managed to recover some of its lost ground to close at Rs 113.25, still a fall of nearly 4 per cent.

DB Realty, which listed in February last year at an issue price of Rs 468 per share, has been the fastest-growing realty stock.

Balwa’s arrest put selling pressure on the stock amid concerns that a few key projects might run into hurdles either because of funding problems or a delay in obtaining statutory approvals.

When Balwa was arrested, DB Realty had said he had been wrongly implicated in the investigations into the grant of 2G licences. It had added that neither he or any other person belonging to the DB Group had done anything inappropriate or illegal.

Two other independent directors of DB Realty have also resigned. Earlier this month, IL&FS Investment Managers vice-president Shahzaad Dalal resigned from the board of DB Realty. On Monday, Chandan Bhattacharya, who was earlier the managing director of the SBI, also quit the board.