MUMBAI (Commodity Online): Metal miner, Sesa Goa Ltd (BOM: 500295) reeled under heavy selling pressure on the Bombay Stock Exchange (BSE) today after the stock sank over 9% in the morning trades.

Company stocks traded at Rs.285.50 down by 9.5% in the morning trading session today. The reports of the government ordering a probe into alleged financial irregularities of the company caused the heavy selling on the counters.

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Meanwhile, the benchmark index, Sensex fell by close to 100 points or close to 0.5% to 16640 points.

The stock hit a high of Rs.309.70 and a low of Rs.275.20 so far during the day. The stock had outperformed the market in past one quarter, gaining 35.19% as against 8.85% rise in the Sensex.

Officials of the Ministry of Corporate Affairs, Govt. of India reportedly said Sesa Goa was 'prima facie' found guilty by the Registrar of Companies (ROC) of fudging invoices. The RoC, which had been investigating the case since early 2003, submitted its report on Sesa Goa early last week. The allegations against the company, according to reports, also includes diversion of funds.

Sesa Goa's managing director P K Mukherjee was quoted by media as saying that the company is not aware of any such probe.
The London-based Vedanta Resources in 2007 had acquired a 51% controlling stake in Sesa Goa from Mitsui & Co, for USD 981 million.

Sesa Goa's net profit fell 54.6% to Rs.139.11 crore on a 45.9% decline in sales to Rs.448.25 crore in Q2 September 2009 over Q2 September 2008.

The profitability during Q2 September 2009 was adversely impacted on account of lower sales realisations of pig iron and metallurgical coke, which was partly off-set by lower input costs. During the latest quarter, the Government of India had changed the basis of royalty-charges on iron ore to ad-valorem (10%) basis from specific duty being levied earlier. This change in duty is effective from 13 August 2009.

Meanwhile, the company's shareholders in an extraordinary general meeting (EGM) held on 20 October 2009, approved raising up to Rs.6,000 crore through issue of securities in domestic as well as overseas markets.
In Q2 September 2009, Sesa Goa raised USD 500 million through foreign currency convertible bonds (FCCB) with the conversion price pegged at Rs.346.88 each. The proceeds from the FCCB offering would be used to expand the mining operations and to further develop its pig iron and metallurgical coke operations.
Sesa Goa operates a 2.8 lakh tonnes per year (TPY) metallurgical coke plant and a 2.5 lakh TPY pig iron plant. It has mining operations in Goa, Karnataka and Orissa. The company exports approximately 5 million tonnes of iron ore, fines and lumps to customers in Japan, China and Europe annually.