Two shareholder representatives on the Board of Directors of the State Bank of Travancore (SBT) on Thursday said the procedure for the acquisition of SBT by the State Bank of India (SBI) has been vitiated and that laid-down norms have not been followed.
Directors Sajan Peter and M C Jacob said they had recorded serious concerns about the proposal for the merger.
“A review of the procedures followed would establish it as a good example of how an acquisition should not be done,” they said.
The duo said they represent the entire non-SBI shareholders in the SBT. SBI holds over 79 per cent shares in SBT.
Peter, a retired IAS officer, is also the chairman of Audit Committee of the Board.
Earlier, the Kerala Assembly, barring one legislator, had requested the Union government to desist from the move to acquire SBT, which plays a unique role in the state’s development.
It has a market share of 23 per cent of deposits and 18 per cent of advances in Kerala, and its share of NRI business is estimated at around 30 per cent.
The duo said a meeting of the Board of Directors of SBT was urgently convened in Mumbai on May 16 and a two-and-a-half page long memorandum was tabled, with recommendations regarding approval of the Board of SBT to enter into negotiations with SBI for the acquisition.
“There had been no analysis of the pros and cons of such a recommendation. We understand that the same memorandum, word-for-word, with only the names of the banks changed, was placed before the Boards of other four associate banks, namely SBH, SBP, SBBJ and SBM,” they said.
Data on working results after the merger of State Bank of Saurashtra and State Bank of Indore were not made available for an examination of the claims of growth of State Bank of India after the merger. It was further pointed out that when State Bank of Indore was merged, matters came to a standstill for almost a year.
The duo said a meeting of the Audit Committee of the Board and the Board was convened in Mumbai on August 18 and agenda like the swap ratio was tabled, leaving no time for negotiations.