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ICICI moves cops against 'malicious' brokers

Press Trust Of India  |  Mumbai 

Battered by rumours that cast doubts about its financial health, ICICI Bank today approached the police alleging that certain brokers with a Mumbai-based brokerage were indulging in “malicious” rumour mongering.

Terming it as economic terrorism, an ICICI Bank spokesman said, "We will be approaching all regulators, including the on this." ICICI Bank scrips have seen a steep fall, including the 20 per cent dip on Friday, in the face of the onslaught of rumours. This is despite several statements made by the largest private sector lender that it was facing no crunch and that its financial position was strong.

In its complaint filed before the economic offences wing of the Mumbai police as also the Coimbatore police, the bank said that a broker or a sub-broker in Coimbatore was indulging in misinformation through SMS and other means, causing panic amongst the depositors and subsequent withdrawal of deposits. ICICI Bank Managing Director K V Kamath has already spoken to Minister P Chidambaram about the vested interest, who were hammering down the share prices. He has also asked Sebi for a proper investigation.

"The concerted effort to spread malicious rumours could be a new form of economic terrorism (akin to counterfeit currency being put into circulation), the complaint said. According to the complaint, one of the SMSes read, "Kindly withdraw all your deposits and cash in account with ICICI Bank as ICICI Bank has already rushed to RBI for insolvency."

Rumours were also spread about its top management selling shares of the bank, leading to panic in the share market, the complaint alleged. To prove its point, the bank cited an SMS saying, "icici top officials r all selling thr icici holdings in mkt 4 lst 2 wks. Thy knw that icici is going to annnce vry bad bankruptcy soon. This is confirmed news from1 of its board drctrs. Exit all ur holding in icici n all bnk stks. Kamath also selling his binami holdings from 750 levels (sic)." The bank had conducted investigations using its own machinery to find out the source of such malicious communications, it said. The bank found that such messages were sent by a mass/group SMS sending website called www.Smsgupshup.Com & Maya news.

The bank has been maintaining that it is well capitalised. The capital adequacy of the bank is over 13 per cent against the regulatory requirement of 9 per cent.

Besides, global rating agencies like Moody's and S&P have also said ICICI Bank's UK subsidiary has no high risk sub-prime securities and enjoys robust asset quality and liquidity. These ratings assume importance in the wake of reports that it was over-exposed to risk caused by the global meltdown and that the bank's loan profile was not fully secured and credible.

Meanwhile, the Economic Offences Wing of the city police has said it is still to see the complaint filed by ICICI bank against some brokers with a Mumbai-based brokerage for allegedly indulging in "malicious" rumour mongering, a senior police official said today.

"The bank authorities might have sent its complaint but I have not received anything from them yet," Additional Commissioner of Police (EOW) Sanjay Saxena told PTI.

Saxena said that he was unaware about the mode in which the complaint might have been sent and that he had not seen any complaint from the bank till today.

First Published: Mon, October 13 2008. 00:00 IST