Shareholders of Dhanlaxmi Bank vote against MD and CEO

By: |
October 1, 2020 5:47 AM

Sources said shareholders were concerned the ‘identity’ of the bank was being diluted and were seeking a change in the top management.

Three of Dhanlaxmi’s board members had quit in June 2020, including Sajeev Krishnan, part-time chairman and independent director, who cited personal reasons for stepping down.Three of Dhanlaxmi’s board members had quit in June 2020, including Sajeev Krishnan, part-time chairman and independent director, who cited personal reasons for stepping down.

Thrissur-based lender Dhanlaxmi Bank plunged into a crisis on Wednesday after shareholders voted against the appointment of Sunil Gurbaxani as MD and CEO of the lender.

More than 90% of the shareholders voted against the appointment of the CEO who had been appointed in February following an approval from the Reserve Bank of India (RBI).

The voting took place at the bank’s annual general meeting (AGM) with only 9.5% votes polled in favour of his appointment. Shareholders, however, approved appointment of all other directors with overwhelming majority.

The lender’s board has recommended to RBI that a ‘committee of directors’ be constituted to exercise the powers vested with the managing director & CEO till such time a new MD & CEO takes charge. This was needed to ensure continuance of all the banking transactions as in the normal course and to ensure that the concerns of all stakeholders are properly addressed.

Sources said shareholders were concerned the ‘identity’ of the bank was being diluted and were seeking a change in the top management. The developments at Dhanlaxmi follow equally tumultuous ones at Lakshmi Vilas Bank where, shareholders last week, voted against the appointment of seven directors, including that of S Sundar as the bank’s MD and CEO.

Three of Dhanlaxmi’s board members had quit in June 2020, including Sajeev Krishnan, part-time chairman and independent director, who cited personal reasons for stepping down. KN Murali, independent director, and G Venkatanarayanan, an additional director, resigned with effect from June 29, 2020, before their terms came to an end.

Dhanlaxmi Bank reported a net profit of Rs 6.09 crore in the June quarter, less than a third of the `19.84 crore reported in Q1FY20. The gross non-performing ratio stood at 6.89% and the net NPA ratio was 2.18%. The bank’s capital adequacy ratio was also above the regulatory requirement, at 13.94%.

At Wednesday’s annual general meeting, shareholders voted for other resolutions which include appointment of independent directors PK Vijayakumar, G Rajagopalan Nair, G Subramonia Iyer and Suseela Menon R to the board.

In a recent development, RBI appointed its general manager DK Kashyap as additional director on the board of Dhanlaxmi for a period of two years with effect from September 28, 2020.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Bajaj Finance Q2 net falls 36% on higher provisioning
2Gold loans account for 35% of our loan book and can go up to 45%: CVR Rajendran, Managing Director & Chief Executive, CSB Bank
3Delhi HC restrains Canara Bank from flouting SC’s NPA relief order