ICICI Bank share price hits lowest since October, tanks 6% as Videocon controversy draws police, Sebi probe
ICICI Bank share price: Market regulator Sebi said it has started looking into the alleged conflict of interest issue involving banks CEO Chanda Kochhar and promoters of Videocon Industries.
ICICI Bank share price tanked over 6 per cent to Rs 260 after market regulator Sebi said it has started looking into the alleged conflict of interest issue involving bank's CEO Chanda Kochhar and promoters of Videocon Industries. Meanwhile, Reserve Bank of India has imposed Rs 58.9 crore penalty on ICICI Bank for violating security sale guidelines.
The Central Bureau of Investigation (CBI) has also launched a preliminary investigation to assess whether there was any wrongdoing in the bank's lending practices.
Reacting to negative news flow, the stock of the company tanked as much as 6.6 per cent to Rs 260 on the BSE.
"While this fine will not have a material impact on earnings, it is negative on sentiment because other banks seem to have interpreted the rules correctly," IDFC Securities analysts wrote in a note.
"We see pressure in the short term following the fine, allegations and CBI`s preliminary enquiry," IDFC Securities added.
The ICICI Bank-Videocon controversy relates to alleged "quid pro quo" involving loans to the company by a group of lenders, including ICICI Bank and some public sector banks.
The markets watchdog has begun a preliminary enquiry into various disclosures made by the top private sector bank over the last few years while the stock exchanges may seek additional clarifications regarding recent reports in this regard that relate to dealings that took place way back in 2012, a senior official told PTI.
On Friday, RBI slapped a monetary penalty of Rs 58.9 crore on ICICI Bank for non-compliance with regulatory directions on direct sale of securities from the bank’s Held To Maturity (HTM) portfolio and specified disclosure in this regard. The is probably the highest penalty that the regulator has imposed on a commercial bank in recent times.
police launched a preliminary inquiry about two months ago into Deepak Kochhar, the husband of the bank's CEO, Chanda Kochhar, and officials at ICICI Bank and Videocon Group, Reuters reported on Saturday, citing sources.
(With inputs from agencies)
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