CLB Stays Federal Bank Move To Keep ICICI Bank Out

Kochi, Mumbai, Sept 28 | Updated: Sep 29 2004, 05:30am hrs
The Company Law Board (CLB) has put a stay on all resolutions put to vote at the 73rd annual general meeting of Federal Bank on Monday, where none of the ICICI Bank nominees was elected. The board passed this order in Chennai on Tuesday on the ICICI Bank plea that the presiding officer had flouted norms by denying it the rightful share of 20.4% of total voting rights.

CLB ruled that none of the resolutions passed by ballot was effective till the ICICI Bank application was disposed of. In such a situation, the composition of the board remains the same except for the two vacancies created by retirement.

The presiding officer, bank chairman KP Padmakumar, had misinterpreted the law limiting ICICI Bank voting rights to 12%, stating that this was the original share the bank had got in 1994 - the year of notification on the voting rights of ICICI Bank, a senior ICICI official claimed.

Taking into consideration the margin of around 17 lakh votes by which the official reso-lutions for election of directors were defeated, the outcome would have been different had ICICI Bank been allowed to have its full share of voting rights instead of restricting it to 12%, he said.

The CLB will now issue notice to Federal Bank and ICICI Bank will get an opportunity to present its case at the next hearing of the board, sometime in November.