Chaos At Mogaveera Bank As Six Directors Resign In Revolt

Mumbai, January 22: | Updated: Jan 23 2003, 05:30am hrs
Six directors of the Mumbai-based The Mogaveera Co-operative Bank Ltd have put in their papers in protest against what they allege are the activities of the present chairman of the bank DL Amin. The directors claim that Mr Amin has been functioning against the interests of the bank, without regard to the directors opposition to some of his initiatives. There were in all 12 non-employee directors in the bank.

Five of the directors who have resigned addressed a press conference on Wednesday. They said: "We do not want to be party to the activities of the chairman, which are against the interests of the bank. We have decided to resign as our disagreement has been responded to with vindictiveness".

Those who resigned are Sanjeeva Kanchan, KL Bangera, Sundar Putran, Dr Nalini Rao and Yashodha Putran. Another director, who was said to have resigned along with the five directors and was not present at the press conference, was out of the town, they said. All these directors, along with Mr Amin, were elected to the banks board in July 1999.

The directors said that the bank, under Mr Amins stewardship, had been involved in land and building deals which were priced at twice the market price at least. They were referring to the banks property deals for its branches at Kandivli and Vikroli and a plot of land at Saki-Naka for housing the banks proposed headquarters. The bank has 10 branches in Mumbai.

When contacted by FE, Mr Amin said he was out of station and would respond to the charges on his return to Mumbai on Thursday.

The bank had been in the news for all the wrong reasons many times in the last couple of years. Earlier, the chairman sacked one of the directors -- DP Karkera -- for alleged irregularities; but he was reinstated later as vice-chairman of the board. The chairman was also accused of suspending managing director SK Salian twice for not toeing his line, the case relating to which is pending with the Mumbai High Court. That apart, the elections for the chairmanship had also been postponed thrice because some of the directors were said to have been arrested by the police on complaints from Mr Amin.

A copy of the resignation letter signed by Sunder Putran, which would be submitted by the six directors to the banks chairman, says: "All my warnings to you over the last several months have fallen on deaf ears and therefore, it has become imperative for me that I resign from the board. By doing this, I distance myself from all your wrong decisions." The copies of the resignation letter would also be sent to the Union minister of state for finance, Anandrao Adsul, Maharashtra state commissioner of co-operatives, Reserve Bank of India (RBI), Economic Offences Wing and Mumbai District Co-operative Societies Federation, they said.

The rebel directors also said that currently, the bank is saddled with about 33 per cent of non-performing assets, though they claim this is being played down by the Mr Amin. The former managing director of the bank Mr Salian said the growth of deposits which was over 20 per cent for the past few years has now become stagnant for the last year, at around Rs 220 crore.