ICICI Bank?s management on Wednesday issued a statement clarifying its position on rumours pertaining to insider trading of the bank?s stock.
The clarification states, ?It has been brought to the notice of ICICI Bank that a malicious rumour is being spread to the effect that some of the top management have been selling ICICI Bank shares for the last few days. These rumours are baseless and irresponsible, and no shares have been sold by members of the top management of the Bank during the current year. ICICI Bank is taking up this matter with regulatory authorities for necessary action against those responsible for the rumours.?
However, the ICICI stock witnessed a severe intraday volatility on Wednesday, as it depreciated by around 12% on the BSE during trading hours.
ICICI Bank?s share price on the BSE has depreciated by around 11% in the last three days. The ICICI stock, which traded on the BSE at Rs 628 during the closing hours on Monday (September 15) was traded at Rs 560 during the closing hours on Wednesday. However, BSE Sensex and BSE Bankex have plummeted by around 2% and 3% respectively in the past three days.
ICICI has already made a provisioning worth $12 million for its UK subsidiary, ICICI Bank UK Plc, which has $80 million worth investment in bonds issued by Lehman Bros (facing closure on account of filing for bankruptcy). It plans to have another $28 million provisioning for the same in Q2 2008-09.
However, the bank estimates at least 50% recovery of Lehman bad debts.
?Rising credit spreads for global banks in the past two months are likely to have reduced market value of bonds held by ICICI in the UK, which may lead to provisions of about $200 million,? an analyst said.