In a dramatic development, the shareholders of struggling Lakshmi Vilas Bank (LVB) have voted against the appointment of seven directors to its board, including that of S Sundar as the managing director and chief executive officer, as well as promoters KR Pradeep and N Saiprasad.
Shareholders rejected the appointments of Saiprasad, Pradeep and Raghuraj Gujjar as non-executive and non-independent directors at the annual general meeting (AGM), the Chennai-based bank said in a regulatory filing.
They also voted against BK Manjunath, Gorinka Jaganmohan Rao and YN Lakshminarayana Murthy as non-executive and independent directors. These appointments were taken up for voting at the AGM on September 25.
The promoter group holds only 6.80 per cent stake in the private bank. The lender posted a net loss of Rs 112.28 crore in the June quarter of FY21 as against a loss of Rs 237.25 crore in the same period last year. Its EPS was -3.33 per cent. Almost one fourth of the bank’s advances have turned bad assets.
The bank’s gross non-performing assets stood at 25.40 per cent of advances as on June 2020 as against 17.30 per cent a year ago. Its total capital adequacy ratio, as per Basel Ill guidelines, was at 0.17 per cent as of June 2020 as against 1.12 per cent in March 2020. Gross advances as of June 2020 were to the tune of Rs 16,310 crore with net interest income at Rs 90.76 crore. Total deposits were pegged at Rs 21,161 crore. LVB, which was struggling for fund infusion, was in talks with various entities for a merger or capital.
“Despite logistical challenges arising due to COVID-19 situation, we have made significant progress with Clix group for the proposed amalgamation of Clix Capital Service Pvt Ltd and Clix Finance India Pvt Ltd into the bank. However, there may be slight delay in the mutual due diligence and preparation of documents for regulatory requirements due to Covid situation and travel restrictions. Hence, both the parties mutually agreed to extend the exclusivity period till September 15, 2020,” the bank had said in a statement on July 30.
Currently, Meenakshi Sundaram is LVB’s president-COO. The Reserve Bank of India has two nominees on the bank’s board — Rajnish Kumar and Sundaram Shankar. The bank appointed S Sundar, its chief financial officer, as the interim managing director and CEO effective January 1, 2020.
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