Stung by the fact that it was in the news throughout the day for all the wrong reasons, ICICI Bank — the country’s second largest lender — said it is investigating the source of rumours on its top management selling shares, which resulted in its scrip falling 5.25 per cent on the Bombay Stock Exchange today.
A bank executive said the fall may be due to a cartel of brokers, which was responsible for spreading rumours on the top management selling shares. “No one from the top management has sold shares in the last one year,” said the spokesperson. The rumours prompted the bank to issue a statement in the afternoon.
The spokesperson also said the bank will investigate the source of the rumours and report the same to the regulators and the stock exchanges for appropriate action.
In addition, there were reports of excess withdrawal at two ATMs located in Chennai and on the outskirts of Ahmedabad though withdrawals at the national level remained within limits, a bank spokesperson said.
ICICI Bank shares closed at Rs 560.30 on BSE today compared to Rs 591.35 yesterday. Almost all bank shares were hit and the Bankex was the second biggest loser on BSE after the real estate sector, falling 3.79 per cent today. But unlike other banks, ICICI Bank shares had dropped 5.7 per cent on Tuesday too.
The rumours prompted the bank’s joint managing director and CFO Chanda Kochhar to write to employees this evening reassuring them that the exposure to Lehman Brothers bonds were insignificant compared to the size of the balance sheet.
Yesterday, ICICI Bank disclosed that its subsidiary in the United Kingdom had an $80-million exposure to bonds issued by Lehman, which has filed for bankruptcy in the United States. While ICICI Bank UK Pls has already made provisions of $12 million, an additional provision of $28 million may be required if a 50 per cent loss is assumed, the bank had said.
What led to withdrawal from the two ATMs is, however, unclear though bank executives said that in Chennai a local television channel ran a report which made some people rush to withdraw cash.
A few years ago, ICICI Bank saw large withdrawals from its ATMs and branches after rumours that the bank was facing difficulties.
