The KP Factor

It had pointed to the fact that these investment companies mobilised large sums of money by way of share application and convertible debentures and used that money to buy shares of GTB. The bank also exceeded the RBI8217;s capital market exposure limit in 2000. GTB promoter Ramesh Gelli, who was the chairman and MD of the bank, was forced to quit from the post in 2001 after his involvement came to light. In December 2003, the SEBI debarred Gelli and associates from dealing in GTB scrips in any manner for alleged manipulations in the bank8217;s shares, till the regulator completes investigations.

Public sector banks were not keen on bailing out GTB through the merger route. Reason: lessons from the bad experience of the PNB-Nedungadi Bank merger.