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Dhanalakshmi Bank to take possession of part of Devaki Hospital

Sanjiv Shankaran

Chennai , Jan. 31

THE Chief Metropolitan Magistrate, Chennai, has passed an order under the Securitisation Act to allow The Dhanalakshmi Bank to gain possession of a part of Devaki Hospital on February 2.

The order comes in the wake of a management struggle between the hospital's nephrologists and the former Managing Director, Ms Chitra Chokalingam. Simultaneously, the hospital has had to deal with a financial crunch that had led to delayed salary payments last year.

Currently, a three-member managing committee that includes Ms Chokalingam handles the hospital's affairs. The Madras High Court appointed the committee after the hospital's governing board revoked Ms Chokalingam's power as a Managing Director last year, and the dispute was brought before it.

The managing committee is expected to continue till the confusion surrounding last year's open offer to shareholders made by the nephrologists' team is cleared. The nephrologists made an open offer for 40 per cent of the equity at Rs 11 a share last September.

When the offer was made, they had already gained control of about 10.21 per cent of the company's equity.

Officials at Indbank, the merchant banker to the offer, said the acquirers bought about 23.07 per cent of the equity during the offer.

Consequently, their equity stake, at about 34 per cent, exceeded Ms Chokalingam's stake of about 26 per cent.

Some of the shares sold in open offer are in the form of physical certificates. Their transfer requires the consent of the managing committee, said hospital sources. The committee, however, has not yet given its consent, leading to uncertainty about the status of the offer.

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