Mumbai : More troubles are ahead for ICICI Bank as the lender and its top management risk facing a class action lawsuit in the US if charges of corruption and malpractice are proved and spreads to other accounts, US-based brokerage firm Jefferies said in a note on Wednesday.
“Emerging risks (for the bank) could be a formalised corruption charge and more such instances coming up, and (the) bank facing a “class action” suit and a costly settlement,” Jefferies analysts Nilanjan Karfa and Harshit Toshniwal said in a note.
A “class action” lawsuit in US is one in which a group of people sue an individual or a corporate defendant for financial or other damages caused by negligence or mismanagement. These law suits in normal course could seek settlements in billions of dollars for the losses suffered by a group of individuals which in the case of ICICI would be holders of its American Depository Receipts (ADRs) which make up about 24 per cent of the bank’s shares. The brokerage also has cut ICICI Bank’s price target to Rs 370 per share from Rs 410 per share.
Meanwhile, SFIO said there is no reference currently with the corporate affairs ministry on the issue involving ICICI Bank and Videocon Group, a senior official said on Wednesday.