ICICI Bank shares reeling on police probe report

Apr 06, 2018, 03:23
ICICI Bank shares reeling on police probe report

The income-tax department will soon approach its counterpart in Mauritius to seek details related to First Land Holding, based in the island nation, which invested Rs 325 crore in NuPower Renewables run by Deepak Kochhar, husband of ICICI Bank CEO Chanda Kochhar, officials said.

However, the bank did not say anything with regard to review of insolvency cases which was part of board meeting agenda for today.

Stocks of ICICI Bank dipped to a five month low or almost 6% on Monday after a CBI team launched a preliminary investigation in the case of loans disbursed to Videocon Group.

ICICI Bank had loaned United States dollars 100 million through its Canadian subsidiary to Videocon, which was repaid in full with interest, Dhoot said, adding that there were enquiries by the Enforcement Directorate in the matter, but it did not find any wrongdoing under the foreign exchange management laws.

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The CBI has launched a probe to verify the bank's loans to the Videocon group and possible nepotism in the loans extended. The amount was a part of Rs.40,000 crore loan that Videocon group secured from a consortium of 20 banks led by SBI.

The Central Bureau of Investigation (CBI) has already registered a preliminary enquiry (PE) into the alleged nexus between Deepak Kochhar and Videocon group chairman Venugopal Dhoot.

ICICI Bank's board, however, has reposed full faith in Kochhar. Ms Kochhar, who is known for her extra ordinary contribution in taking retail banking to all together different level, ICICI bank in particular and banking sector in general, is facing conflict of interest charges by one of the investors of ICICI bank and Videocon group.

Asked about the alleged Rs 64 crore loan given to Nupower by Supreme Energy which is "99.99 percent owned by him", Dhoot initially claimed Videocon does not have any such entity, but then conceded that the Group may have invested "a lakh or two" in some company, but claimed he does not exactly remember.

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Punglia transferred his holding in Supreme Energy to Pinnacle Energy, where Deepak Kochhar was the managing trustee. In both cases, interface with the lenders was inevitable, and it appears that ICICI Bank has acquired stakes of these few companies too. Shares of Videocon Industries also fell 4.97% to Rs 12.42 - the lowest trading permissible limit for the day - on the BSE.

On BSE, the stock fell 7% to Rs 258.90 while it slumped 7% to Rs 258.80 on NSE. Approximately 5,108,606 shares were traded during trading, a decline of 36% from the average daily volume of 7,936,838 shares.

Among 2 analysts covering Icici Bank Limited (NYSE:IBN), 2 have Buy rating, 0 Sell and 0 Hold. The institutional investor held 2.50 million shares of the commercial banks company at the end of 2017Q4, valued at $24.37 million, up from 1.82M at the end of the previous reported quarter.

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