Jyoti CNC Automation Drops Around 16% After French Probe on Subsidiary

Shares of Jyoti CNC Automation Limited fell sharply on 13 April. French authorities had launched a formal judicial investigation into its material subsidiary, Huron Graffenstaden SAS, over alleged violations of European Union export-control laws involving machinery with dual-use technology.

In an exchange filing on Sunday, the company disclosed that the probe centres on export controls and export documentation of certain machines classified as dual-use. French authorities have taken a set of interim measures against the subsidiary pending the investigation’s outcome.

Three actions are now in force. The director general of Huron Graffenstaden SAS has been temporarily barred from discharging duties at the firm. French authorities have seized two residential properties owned by Jyoti SAS and frozen certain bank accounts totalling €4 million. A formal judicial probe has been initiated against Huron Graffenstaden and some of its employees.

Huron Graffenstaden has received formal notice of these actions. The subsidiary refutes the allegations and is seeking legal counsel, filing with exchanges stated it ‘will contest it strongly.’ Jyoti CNC noted that while seized assets and the temporary unavailability of some employees may create operational constraints, day-to-day business at Huron Graffenstaden remains unaffected. The Rajkot-headquartered machine-tool maker also said the actions are not expected to hurt Jyoti CNC’s standalone operations, which contribute over 85% of the group’s revenue.

At 11:06 am on NSE, shares were down by 13.21% at Rs 711.00, after hitting an intraday low of Rs 693.75, a drop of roughly 15.5% from the previous close of Rs 819.20.

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