According to Mint, three investors made large sales of their holdings in Paytm, IIFL Finance Ltd., and Edelweiss Financial Services Ltd. just weeks before the Reserve Bank of India (RBI) took regulatory action that severely damaged their equities.
The three businesses were subject to business limits and regulatory action by the central bank from December to May, citing a variety of concerns including poor KYC checks and governance.
According to a report citing exchange data, Mohnish Pabrai, Prem Watsa, and Softbank, respectively, sold significant stakes in Edelweiss, IIFL, and Paytm before to the crackdown.
According to the report, even though there was no obvious connection between the two, one proxy advisor described the transaction as "odd," while another said the market watchdog should look into why these individuals were selling their shares.
According to a report citing exchange data, Mohnish Pabrai, Prem Watsa, and Softbank, respectively, sold significant stakes in Edelweiss, IIFL, and Paytm before to the crackdown. Even though there was no obvious connection between the two, one proxy advisor described the transaction as "odd," while another said the market watchdog should look into why these individuals were selling their shares.
Financial Services Edelweiss
Veteran American investor Pabrai, who was born in India, sold 3.83 percent of his Edelweiss shares between February 8 and April 3. The RBI placed limitations on two of Edelweiss Financial Services' financial services businesses on May 30, citing serious supervisory concerns, which caused the stock price to plummet 16 percent in trading. Pabrai was the company's 7.08 percent owner.
A Pabari spokeswoman was cited as stating, "We have no further comment. We were not aware of the RBI action until we read it in the media."
IIFL
In December, Watsa's fully owned subsidiary FIH Mauritius, which is held by Fairfax India Holdings, sold 5.66 percent of its shares. A day after the RBI ordered the business to cease authorizing or disbursing gold loans with immediate effect due to certain serious supervisory concerns, shares of IIFL Finance fell 20% to reach the lower circuit.
According to the article, Watsa, who holds a 15.12 percent stake in the business, ignored an email asking for an answer.
Paytm
Softbank, the third-largest shareholder in One97 Communication, the business that owns Paytm, sold two percent of its shares in the payments company between December 19 and January 20. Between January 23 and February 26, it sold an additional 2.7%. Paytm Payments Bank was subject to severe business limitations on January 31 by the RBI, including being unable to take new deposits or complete credit transactions beyond February 29.
Although Softbank declined to comment, the report stated that an official who was aware of the decision stated that the share sale was unrelated to any regulatory action.
