StanChart IDR crashes 20% over Iran-related transactions

Standard Chartered's Indian depositary receipts (IDR) crashed on the Bombay Stock Exchange Tuesday. The IDR was locked down after falling 20 per cent to an intraday low of Rs 83.15 on the BSE.

Indian investors have invested in the British bank through the Indian Depository Receipt, which is an instrument declaring ownership of shares of a foreign company. The IDR is like the US-listed American Depository Receipts (ADRs) of tech companies like Infosys.

"Today's gap down is damaging the stock. It has been in a range and looking for a breakout. If it fails to recover, the trend would be on the downside," Kunal Bothra, senior technical analyst at LKP told NDTV Profit today.

The lender's Indian securities have seen very low trading volume since their listing on June 2010.

Shares in the London-based bank have come under huge selling pressure after New York's state regulator threatened to strip the lender of its state banking licence, saying it had hid $250 billion in Iran-related transactions.
Standard Chartered was surprised by the statement, even though it has been in talks with U.S. regulators over the matter for years. Its shares were 18.4 per cent lower at 12.00 pounds by 0820 GMT on Tuesday.

The shares had already fallen 6.2 per cent on Monday, sliding on the close just as the news emerged.

In a response to the stock exchanges, the bank said the US regulatory order charging it with $250 billion worth secret transactions with Iran does not present the "full and accurate" picture and over 99.9 per cent of its Iran-related business was in compliance with the relevant regulations.

"The group does not believe the order issued by the DFS presents a full and accurate picture of the facts. It strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS. The Group takes its responsibilities very seriously and seeks to comply at all times with the relevant laws and regulations," StanChart said in a filing with the stock exchange.


(With inputs from Thomson Reuters)