Business - India;ICICI alleges SMS Terrorism

MUMBAI: Battered by rumours that cast doubts about its financial health, ICICI Bank on Sunday approached police alleging certain brokers with a Mumba
i-based brokerage house were indulging in "malicious" rumour mongering.

Terming it has economic terrorism, an ICICI Bank spokesman said "we will be approaching all regulators including SEBI on this."

ICICI Bank scrips have suffered heavy looses including 20 per cent on Friday in the face of onslaught of rumours though the largest private sector lender has been maintaining that it was facing no crunch and its financial position was strong.

In its complaint filed before Economic Offences wing of Mumbai police as also Comimbotire police, the bank said that a broker or sub-broker in Coimbatore was indulging in misinformation through SMS and other means aimed at creating panic amongst the depositors causing withdrawal of deposits.

ICICI Bank Managing Director K V Kamth has already talked to Finance Minister P Chidmabaram about the vested interest who deliberately are hammering down the share prices and has also asked SEBI for a proper investigation.

"The concerted effort to spread malicious rumours could be new form of economic terrorism (akin to how counterfeit currency is put into circulation to lower the public faith and confidence, and cause national economic interests to be compromised)," the complaint said.

According to the complaint one of the SMS read, "kindly withdraw all your deposits and cash in account with ICICI Bank as ICICI bank already rushed to RBI for insolvency."

The rumours were also spread about top management selling shares of the bank leading to panic in the share market, the complaint alleged.

To emphasise on this, it cited an SMS saying, "ICICI top officials r all sellng thir 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)."

A bear cartel of certain high profile brokers in Bombay Stock Exchange, who have been selling the shares, stocks and securities of the bank for quite some period may also have been behind the circulation of the malicious rumours about the financial status, the private sector lender alleged.

The bank had conducted preliminary investigation utilizing its own machinery as regards the source of such misleading statements, e-mails and SMSs based on false, baseless information, it said.

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.