HC paves way for merger of LKB, CBoP
The long-pending merger of Lord Krishna Bank (LKB) and Centurion Bank of Punjab (CBoP) may finally come through with the Kerala High Court on Wednesday dismissing the petition challenging it.
By TNN |
KOCHI: The long-pending merger of Lord Krishna Bank (LKB) and Centurion Bank of Punjab (CBoP) may finally come through with the Kerala High Court on Wednesday dismissing the petition challenging it.
Justice MN Krishnan upheld the validity of the LKB annual general meeting held on September 30, 2006, in which it decided to merge with CBoP. The petitioner, who is also a shareholder of the bank, had sought an investigation into the affairs of LKB and challenged the merger decision. The petitioner had argued that the decision was taken without sufficient discussion and that many shareholders were not permitted to enter the meeting hall.
A much-relieved MD of LKB, B Swaminathan, said: "The suspense is over and the ball is now in the court of RBI." He expects RBI's approval to come within a week as the regulator has been waiting for the court judgement. The judgement has been postponed several times recently.
The court also declined petitioner Umeshkumar Pai's plea to direct the government to appoint an inspector to probe the alleged irregularities in the conduct of the AGM and the functioning of the bank. The court was of the view that in such cases, there must be intrinsic evidence of fraud to order an inquiry and the fraud could not be inferred from mere conjectures.
On account of the pending court case, both banks had extended the deadline for merger by three months to October 31. LKB had also obtained permission from RBI for extension of time till September 30 to announce its financial results.
The LKB-CBoP merger in the ratio 5:7 was approved by the AGMs of the respective banks in September last year. But the banks could not proceed further as it was challenged in the court by some shareholders. RBI has also withheld its decision on the merger, pending the judgement.
Justice MN Krishnan upheld the validity of the LKB annual general meeting held on September 30, 2006, in which it decided to merge with CBoP. The petitioner, who is also a shareholder of the bank, had sought an investigation into the affairs of LKB and challenged the merger decision. The petitioner had argued that the decision was taken without sufficient discussion and that many shareholders were not permitted to enter the meeting hall.
A much-relieved MD of LKB, B Swaminathan, said: "The suspense is over and the ball is now in the court of RBI." He expects RBI's approval to come within a week as the regulator has been waiting for the court judgement. The judgement has been postponed several times recently.
The court also declined petitioner Umeshkumar Pai's plea to direct the government to appoint an inspector to probe the alleged irregularities in the conduct of the AGM and the functioning of the bank. The court was of the view that in such cases, there must be intrinsic evidence of fraud to order an inquiry and the fraud could not be inferred from mere conjectures.
On account of the pending court case, both banks had extended the deadline for merger by three months to October 31. LKB had also obtained permission from RBI for extension of time till September 30 to announce its financial results.
The LKB-CBoP merger in the ratio 5:7 was approved by the AGMs of the respective banks in September last year. But the banks could not proceed further as it was challenged in the court by some shareholders. RBI has also withheld its decision on the merger, pending the judgement.
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