How the Directors of Gujarat Ambuja manipulated the Holcim Royaly Issue

From the Start of the October series and Ambuja Equity, fluctuations of 5% to 8% were occurring daily. The Equity price in a month went up from 190 to 217 and then over three days went from 217 to 203. and possibly much lower on the next trading day, ie tomorrow.
Two Independent directors issued a red flag notice's to the board of Gujarat Ambuja highlighting the Holcim Royalty demand of additional 1.5% of PAT . This makes the total royalty to 2% of profits after taxation. Which is a huge figure of 500 crores, affecting the company's bottom line significantly. When the Quarterly results were declared, the royalty issue was not mentioned. Before this it was a rumor, not news. It was only after these so called red flag notices did the issue come out in the open. And as expected, Inspite of significantly good results the prices again went south.
Gujarat Ambuja did not bring this issue out in the open earlier as they wanted prices to remain high and fooling the investor into thinking all was well. Legally there is not much they could do, Holcim which owns 50% of Ambuja and ACC legally cannot be stopped from demanding a royalty fee.
Whether they can arbitrary demand 1.5% additional royalty is the Issue.
This fact was hidden from the public by the directors and consequently rumors started circulating. Until the issue was out in the open because of these red flag notices.
Ambuja should have officially informed the share exchanges regarding the increase in royalty. They did not report this fact to the exchanges and let rumors circulate. Because of which many investors who bought at a high price got trapped, lost heavily and may still loose much more.

The Business Standard website reports, regd the Red Flag raised...

The Economic times,

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