CLB order freezes changes in UWB board

Our Bureau

Pune, Aug 21: THE battle for management control of United Western Bank has tilted slightly in favour the existing bank management. The Company Law Board (CLB), principal bench, New Delhi on Tuesday passed an interim order restricting implementation of any resolution passed in the ensuing annual general meeting of the UWB effecting a change in composition of the Board till the petitions before the principal bench are disposed off.

The AGM is scheduled to be held on August 23, 2001. Acceding to the request made by UWB under section 409 of Companies Act, 1956, the CLB has directed that the present composition of the Board shall continue till the disposal of the petition.

The applications made by Makharia Group, Sicom and United Western are presently being heard by CLB. Sicom and the Makharias had served notice for the appointment of its four representatives in place of existing four directors on United Western’s Board in the ensuing AGM.
Considering the time taken for hearing, the United Western Bank had filed an application Under Section 409 of Companies Act, 1956 requesting for interim order in the matter.

In its interim order, CLB has also directed the Bank to hold the AGM under the chairmanship of Mr CR Mehta, former member of CLB. He will be conducting the meeting and submitting his report of the proceedings of the meeting within 10 days to the CLB.

It has also directed that the business related to the appointment of directors shall be by poll. However, no resolution passed effecting a change in the composition of the Board shall have effect unless confirm by CLB, Delhi Bench and no effect shall be given to the resolutions relating to appointment/removal of directors till the petitions are disposed off.

The UWB had approached the Company Law Board for freezing the voting rights of the Makharia group shareholders. The Makharia group in turn approached the Board asking to suspend the voting powers of the employee equity trust of the bank.

This trust holds 8 per cent of the bank while the rest is spread between 48,000 shareholders. The Makharia group holds 17.5 per cent-odd share in the bank while Sicom, has a 9.91 per cent stake. Sicom and the Makharia group had requisitioned an extra-ordinary general meeting for appointing four of their nominees on the UWB board. The CLB had passed an order in this regard but both parties have gone in for appeal in the Mumbai High Court against the CLB order.