Stock market traders seem to be upset with no confirmation about leading investor Rakesh Jhunjhunwala’s proposed $25-million investment in the recently announced preferential share offer by YES Bank. YES Bank share price was down nearly 10 per cent on Tuesday to close at ₹50.55 on the BSE.
Jhunjhunwala was expected to participate in YES Bank’s preferential offer at around ₹78 per share, and all eyes were on the bank board, which met on Tuesday. The bank only said that they were favourably considering investment by Citax Holdings. On Monday, BusinessLine had reported that Jhunjhunwala is likely to withdraw from the offer. “The YES Bank press release does not mention the investment offer by Jhunjhunwala. One does not know if the offer stands now,” said JN Gupta, founder, SES, a shareholder advisory firm.
There is a view among legal experts that YES Bank board could invite action from the regulator for announcing the names of investors before confirmation, which could have caused loss to many investors and traders in the market. A few days ago, the share price of YES Bank was trading at around ₹70 when it announced the names of some of the large investors, including Jhunjhunwala. Doubts are now being raised even on Citax Holdings. “One does not know about Citax Holdings and what is their business.
A Google search on Citax shows that it is a UK-based company without a website. It has four directors, four employees, less than £2 million in turnover and does not have a ‘care-of’ address. Srinivas Solraj is shown as director at Citax; he is also the director at some companies in India, whose names has been struck off from the ROC records.
“In the absence of enough and substantial material on Citax, it is very difficult to access if it is a serious player in the offer,” said Gupta. YES Bank declined to comment. Sources close to the bank said Jhunjhunwala’s offer is being discussed, along with others proposals from investors, and a decision will be taken eventually. Jhunjhunwala has not replied to a BusinessLine query sent on Monday asking him if he has decided to withdraw from the investment.
Significantly, on November 4, Rakesh Jhunjhunwala had purchased 1.29 crore shares, amounting to a 0.51 per cent stake in YES Bank. The transaction, through a bulk deal, was at a price of ₹67.10 apiece, taking the total value of the deal to about ₹87 crore.
[“source=thehindubusinessline”]
