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Doubts are being raised about Citax Holdings’ investment in YES Bank. Fund managers say they are confused and wonder if they should believe Citax Holdings at all.
This is because the fund recently claimed, in a letter to YES Bank dated December 10, that it was in the process of liquidating its securities and bonds to ensure that $500 million is deposited in a designated account to be exclusively used for investment in YES Bank.
But, in an interview to a leading business news channel, an official of Citax Holdings said they had recently raised €3 billion, of which one-third would be invested in India.
“Both these statements are confusing. If Citax has €3 billion, it does not need to liquidate $500-million worth bonds and other securities to invest in YES Bank. It is confusing,” a leading foreign fund manager told BusinessLine .
A copy of the letter written by Citax and its statement to the business news channel further complicate the matter.
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 operates from a ‘care-of’ address. Srinivas Solraj is shown as a director at Citax.
“In the absence of enough and substantial material on Citax, it is difficult to assess if Citax is a serious player in the offer,” said JN Gupta, founder, SES, a proxy advisory fund.
YES Bank had first disclosed the names of prospective investors said to be ready to put $1.2 billion into the bank through a preferential allotment.
The bank had said that Rakesh Jhunjhunwala was ready to invest $25 million in the bank’s preferential offer. But the YES Bank board failed to disclose that Jhunjhunwala had not made any “binding” offer.
Experts say that it is a material fact, which, if disclosed, could have affected the share price. YES Bank did not respond to the query on “binding or non-binding” nature of the offer from Jhunjhunwala. A spokesperson said that they had disclosed the names only after taking investors’ approval. Yet, YES Bank has not been able to confirm Jhunjhunwala’s investment so far.
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