No evidence of manipulative trading in ICICI Bank shares: SEBI

Mumbai, Nov 20, 2008 (Asia Pulse Data Source via COMTEX) -- IBN | Quote | Chart | News | PowerRating -- Market regulator SEBI today said it did not find evidence of manipulative trading in shares of ICICI Bank, which had demanded a probe by the watchdog after its scrip came under heavy selling pressure in September.

"While SEBI continues its surveillance of the stock exchange trading in various securities, SEBI did not find evidence of manipulative trading in ICICI Bank shares during the period (September 8 to October 10)," the market regulator said in a statement here.

A spokesperson of ICICI Bank, which had approached the regulator seeking a probe into what they called "beating down" of their shares by vested elements, declined to comment.

SEBI said by and large, the trading patterns are consistent with the shareholding pattern of ICICI with predominant holdings by FIIs, general buying and selling behaviour by FIIs and the broad movements of the market during this period.

The regulator analysed the trading pattern of ICICI Bank shares from September 8 to October 10 this year following the complaint by the country's largest private sector bank.

ICICI Bank MD and CEO K V Kamath had earlier demanded a probe by SEBI, alleging conspiracy by market manipulators to destbilise the bank's shares through rumours.

SEBI said prices of ICICI Bank shares fell by 49.52 per cent from Rs 720.45 on September 8 to Rs 363.65 on October 10 this year.

In its analysis, SEBI said none of the major sellers were observed to be placing orders successively at lower price. "There was no pattern observed regarding placement of successive orders at lower price by sellers to hammer down the price. There was no pattern observed of booking intra-day profits by major clients or brokers."

SEBI said prices of ADRs of ICICI Bank fell more than the shares of ICICI Bank in the Indian market from September 8 to October 10 this year. ICICI Bank's ADRs saw a fall of 53.25 per cent from Rs 717.77 to Rs 335.55 during the period.

Also, during the period, Nifty and Sensex witnessed a fall of 26.82 per cent and 27.3 per cent, respectively, it said.

As per the analysis of ICICI Bank shares during the period, SEBI said the client category-wise breakup of the turnover in the shares of ICICI Bank in the cash market shows that FIIs accounted for 23.75 per cent and 18.61 per cent of the value of shares sold and bought, respectively, while rest of the investors accounted for 76.5 per cent and 81.4 per cent.

"Top 20 investors in ICICI Bank both on net buy and sell basis in the cash market shows that majority of them were FIIs," it said.

Among these investors, 14 FIIs, four mutual funds, one domestic institutional investors and one other net bought ICICI Bank shares, while 17 FIIs, two mutual funds and one other net sold these scrips.

SEBI further said FIIs have reduced their holding in ICICI Bank between the quarter that ended on June 30 and September 30 by around three per cent.

"The underlying shares against ADRs held by the global custodian also show a fall of around 20.5 million shares during the period representing January 1, 2008 to September 30, 2008, indicating an increase in the shares available in the Indian market," the market regulator said.

Today, ICICI Bank share fell by 7.87 per cent to Rs 320.35 on BSE.

SEBI also said the share prices of several leading financial services companies across markets suffered a sharp decline in the backdrop of a global crisis in the financial sector and amid liquidity fears. Rumours of financial trouble have caused a run on the banks in some overseas jurisdictions, it said.

"The main spillovers have occurred in financial markets, reflecting the relative integration of such markets in the global financial system. In India, since January 2008, there has been decline in shares prices across sectors," the market watchdog said.

As per information provided by ICICI Bank on September 16 to the public, ICICI Bank UK PLC is holding investment of 57 million euro or 80 million dollars in senior bonds of Lehman Brothers Inc.

The UK subsidiary of ICICI Bank already holds a provision of about 12 million dollars against investment in these bonds.

"Considering a 50 per cent recovery estimate, the additional provision required would be about 28 million dollars," ICICI Bank had said.

On September 17, ICICI Bank had informed exchanges that a malicious rumour is being spread to the effect that some of the top management has 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," the bank had said.

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