2 days ago
Shares of Mumbai-based private lender, IndusInd Bank Ltd. gained as much as 2% in early trading on Tuesday, April 29, after the lender's deputy CEO Arun Khurana announced his resignation last evening, extending the stock's rally over the last one month.
Khurana's resignation also confirmed a CNBC-TV18 newsbreak from earlier in the month.
In his resignation letter, Khurana, who oversaw IndusInd's treasury front office, where the incorrect accounting of internal derivatives caused losses to the lender, called the recent developments "unfortunate."
"Considering the recent unfortunate developments, wherein the Bank determined an adverse accounting impact on P&L, on account of incorrect accounting for internal derivative trades, I having oversight of the Treasury Front office function, as the Whole Time Director, Deputy CEO and a part of Senior Management of the bank, hereby resign, effective immediately," Khurana wrote.
Grant Thornton, appointed to investigate the matter, determined an adverse accounting impact on IndusInd Bank's P&L to the tune of ₹1,959.98 crore.
The agency identified incorrect accounting of internal derivative trades, particularly early terminations, leading to notional profits & accounting discrepancies.
Earlier this month, PwC’s report on derivative portfolio discrepancies had quantified negative impact as of June 30, 2024 to be at ₹1,979 crore.
The stock has surged 21% in the last month itself. The lender is yet to declare its quarterly results for the January-March period.
IndusInd Bank's promoter holding saw a marginal dip during the March quarter, during which the stock fell 35%.
However, retail shareholders piled into IndusInd Bank's shares as they corrected during the quarter. These small shareholders, or those with authorised share capital of up to ₹2 lakh, now stand at 7.47 lakh, from 6.17 lakh in December. In percentage terms, that figure stands at 9.17% from 7.9% in the previous quarter.
Shares of IndusInd Bank are trading 2% higher on Tuesday at ₹848.35. The stock is up 40% from its 52-week low of ₹606, which it fell to in March. This was after the stock had seen its biggest single-day fall of 27% when the issue first came to light.
(The newsbreak was done by CNBC-TV18's Ritu Singh.)
