Sicom-Makharia bid for control harmful to all parties, says UWB

Sanjay Jog

Mumbai, Aug 21: United Western Bank (UWB) has taken strong objection to the alleged fresh attempt by the Mumbai-based development bank State Industrial and Investment Corporation of Maharashtra (Sicom) along with Makharia Group to gain its control.

Sicom holds a 9.9-per cent stake while Makharias have around 15 per cent equity in UWB.

UWB managing director Shrikant Gadre in a recent communication to Maharashtra chief minister Vilasrao Deshmukh said that Sicom’s move in tandem with Makharia Group to pitch for the control of the bank would prove detrimental to the government and Sicom, besides the employees, customers, and shareholders of the bank.

Sicom had proposed to oppose the directorship of incumbents Anannt Sathe, Kishor Chandratre, GA Lele and Prabha Kulkarni and press for appointment of Dr PC Shejwalkar, SI Jambunathan, PB Kulkarni and Ramesh Venkat at the bank’s 64th annual general meeting slated for August 23.

Mr Gadre has also voiced concern over the state government’s directives to Sicom to take up the appointment of new directors replacing existing ones. The government had asked Sicom to demand for reducing the tenure of Mr Gadre as managing director from two years to one year with effect from November 1, 2000.

Mr Gadre has termed Sicom’s joining hands with Makharia Group as "unfortunate" since the bank had inked an agreement with Sicom about six months ago for joint financing and lines of credit. Sicom had parted ways with Makharia Group last year after the bank’s management agreed to appoint three of its nominees on the board. The bank has already nominated Sicom managing director AKD Jadhav and former state chief secretary Sharad Upasani on its board.

Mr Gadre said that the bank had in principle cleared an assistance of Rs 125 crore at a concessional interest rate of 12 per cent. The bank has forwarded Sicom’s loan proposals of Rs 45 crore for the approval of the Reserve Bank of India.

In addition to this, the bank has invested Rs 15 crore in bonds floated recently by Sicom to clear the backlog of incentives against the receivables of deferred sales tax under the Package Scheme of Incentives.

Mr Gadre has made it clear that there was no fraud involved in the bank’s employees stock option scheme. While carrying out the Esops, existing directors have not sold out their shares.