RBL Stock Down 20% Amid Insider-trading Allegations After CCD Founder VG Sidhartha’s Death
Media reports said that several officials of the RBL Bank sold the shares of the lender after VG Sidhartha’s suicide note hit the social media on 30 July. RBL Bank had exposure to some of the companies controlled and linked to VG Sidhartha.
RBL Bank had exposure to some of the companies controlled and linked to VG Sidhartha.
RBL Bank Ltd shares plunged as much as 20% in intra-day trade on Wednesday, as insider-trading allegations clouded over the bank at the time of Cafe Coffee Day founder VG Sidhartha’s untimely death last month. The stock closed down nearly 12% at Rs 315.15 after hitting an intra-day low of Rs 286.10.
Media reports said that several officials of the RBL Bank sold the shares of the lender after VG Sidhartha’s suicide note hit the social media on 30 July. RBL Bank had exposure to some of the companies controlled and linked to VG Sidhartha. The bank’s shares were, therefore, expected to take a hit after Sidhartha’s death.
VG Siddhartha went missing on the evening of 29 July and his body was found on 31 July. On 30 July, 27 employees of RBL Bank sold their shares in the bank. The RBL Bank stock opened at Rs 448.3 per share on 30 July and ended the session at Rs 398.2, down 12% compared with the previous close. At a total, 3.72 lakh shares worth Rs 15.72 crore were sold by employees at an average price of Rs 421.94 per share.
That evening, after market hours, the bank informed stock exchanges about its exposure to certain operating entities of the Coffee Day Group in the logistics, coffee and real estate businesses. “We would like to state that this specific clarification is being made given the unusual circumstances and in the general interest of investors,” the bank had said in an exchange filing.
It is important to note here that till the evening of 30 July, the information about RBL Bank’s exposure to Siddhartha’s companies was not in public domain.
RBL Bank, in a response to CNBC-TV18’s query on this trade, said: “The Bank has a Board approved RBL Trading Code pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations 2015. The said code lays down processes and procedures to be followed by the employees while trading in the securities (shares) of the Bank. The transactions done by the employees are strictly done within the purview of the said code.”
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