Andhra Bank shares fall 7% on Rs5,000 crore fraud case
Mumbai: Shares of Andhra Bank Ltd on Monday fell as much as 15.5% to hit a 14-year low after the Enforcement Directorate (ED) filed a charge sheet against one of its former directors on a money laundering case.
Andhra Bank shares closed at Rs35.85, down 6.88% on BSE, while the Sensex closed 1.83% up at 33,917.94 points. In intraday trade, the stock fell as much as 15.45%, its steepest decline since 7 May 2010, and touched a low of Rs32.55 a share, a level last seen on 17 May 2004.
The ED chargesheet named the former Andhra Bank director in an alleged Rs 5000 crore bank fraud involving Gujarat-based pharma firm Sterling Biotech Pvt Ltd. Sterling Biotech Ltd hit the 5% lower circuit to Rs2.76 a share on Monday.
According to the charge sheet, ex-director Anup Prakash Garg got over Rs 1.5 crore in bribe from the Sterling Biotech Limited (SBL) group, which is accused of cheating nationalised banks of Rs 5,383 crore. The charge sheet names Garg, and RAG Buildtech, which was allegedly used for laundering the money. Garg served as director from October 2006 to October 2009, during which Sterling Biotech got Rs 235 crore in credit facilities from Andhra Bank, The Hindu newspaper reported.
India’s banking shares have remained under pressure since last month after the surfacing of a $2 billion fraud at public sector Punjab National Bank.
On 14 February, PNB reported it has detected a scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoUs) from a branch in Mumbai to secure overseas credit from other Indian lenders.
Other PSU Banks were also trading lower. IDBI Bank Ltd declined 10%, Oriental Bank of Commerce 6%, Union Bank of India 6%, Bank of India 5.8%, Syndicate Bank 3.8%, Allahabad Bank 3.6%, Canara Bank 3.2%, Indian Bank 2%, Bank of Baroda 2%, State Bank of India 1.6%. Nifty PSU Bank index declined 2.4%.
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