Two promoter companies of Yes Bank have filed a complaint with stock exchanges seeking an investigation into short-sellers dragging down the bank’s share price by spreading false information, according to a report in Moneycontrol.
Yes Capital and Morgan Credits have written a letter regarding the same to the surveillance departments of BSE and the National Stock Exchange (NSE). Rana Kapoor’s daughters Rakhee, Roshni and Radha are directors of these investment companies.
“We continue to witness unabated speculation in the Yes Bank stock, particularly by short sellers who appear to be speculating on the back of unpublished price information led by countless negative messages being circulated on WhatsApp/chat groups. We request you to investigate this highly serious matter,” the letter said.
Short-selling is basically when a trader sells a stock he doesn’t own. In simple terms, the trader borrows a stock, sells the stock, and then buys the stock back at a lower price to return it to the lender. The difference between the selling price and the buying price is his profit.
This is second such letter to the stock exchanges by the two shareholder firms. A similar letter was written last month as well. This time, the two shareholders said they were forwarding the letter to the capital markets regulator Securities and Exchange Board of India (Sebi) as well as the Reserve Bank of India.
The Yes Bank stock has lost as much as 5.5% to Rs 64.10 on Friday after falling nearly 5% in the previous session as well. The stock has corrected by a massive 70% in the last six months.
On Monday, Moneycontrol had reported that Yes Bank founder Rana Kapoor has initiated talks with Paytm to sell his entire stake in the bank, as well as that of his family members, for up to Rs 2,000 crore. Kapoor, with his family members, and the investment firms they control own a 9.64% stake in Yes Bank.