Standard Chartered Bank today lost over 8 billion pounds ($12.5 billion) of market value today in the UK, along with a loss of Rs 500 crore on Indian bourses, as its shares plunged up to 24 per cent in London Stock Exchange, after a hard- hitting order against the bank in the US.

The stock plummeted after the New York state in the US, last night, threatened to revoke its licence and charged it of $250 billion worth secret transactions with Iran.

Reacting to the development, Standard Chartered scrip at the Bombay Stock Exchange fell 19.97 per cent to hit its lowest permissible limit for the day at Rs 83.15. On the NSE, the scrip was down 19.97 per cent at Rs 82.95.

In the process, the bank’s market capitalisation on the Indian bourses fell by about Rs 500 crore to Rs 1,995 crore.

At the London Stock Exchange, Standard Chartered shares plunged 23.9 per cent to 1,119 pence, thus eroding over 8 billion pounds ($12.5 billion) of its market value.

The New York state has threatened to revoke the bank’s licence after charging the UK—based global banking giant of operating as a “rogue institution” and hiding over 60,000 transactions worth $250 billion with Iran.

While the bank has refuted the charges saying that more than 99.9 per cent of its Iran-related transactions complied with the US regulations, the New York State Department of Financial Services (DFS) has charged StanChart of exposing the US financial systems to terrorists, drug kingpins and weapon dealers through its transactions with Iran for about 10 years.

In a 27-page order, the Superintendent of Financial Services Benjamin Lawsky of DFS said that “grounds exist for revocation of Standard Chartered Bank’s licence to operate in the State of New York and that interim measures must be taken to protect the public interest.”

The order accused Standard Chartered of being “motivated by greed.”

Reacting to the regulator’s order, Standard Chartered said it “strongly rejects” the position and portrayal of facts made by DFS.

(This article was published on August 7, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.