Financial Daily from THE HINDU group of publications
Thursday, May 05, 2005
Financial Daily from THE HINDU group of publications Thursday, May 05, 2005 |
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Markets
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Stock Markets Duke Advisors raises stake in United Western Bank M. Ramesh
Chennai , May 4 DUKE Advisors (P) Ltd, which has been buying shares of United Western Bank "aggressively" in the last four months, has raised its stake in the bank to around 3.5 per cent. "We intend to hold a position up to the regulatory limit (of 5 per cent)," Mr Gopal Patwardhan, Managing Director of Duke Advisors, told Business Line. The Pune-based Duke Advisors is a financial advisory firm promoted by Mr Patwardhan's family and Duke Equity Partners LLC, a Los Angeles-based venture capital firm. The company advises high networth clients on investments in small and midcap companies in India, in addition to making select investments on its own account. Mr Patwardhan said that despite concerns of poor financial performance and "alarming" NPA position, "We believe that UWB is a undervalued opportunity." As of December 31, 2004, the bank had net NPAs of 8 per cent. United Western Bank, headquartered in Satara, Maharashtra, is one of the smaller old private sector banks in the country, with a total business of Rs 10,000 crore. Duke had been tracking United Western Bank for over 18 months, especially in the context of the changes in the regulations of the banking sector in India, Mr Patwardhan said. "We purchased shares more aggressively after we reviewed the Finance Minister's policy paper on banking," he said. The bank has a number of corporate governance issues and needs additional capital to improve its balance sheet, Mr Patwardhan observed. (It is understood that the "corporate governance issues" relate to not-so-arms-length dealings with, the State Industrial and Investment Corporation of Maharashtra (SICOM), which has a 9.92 per cent stake in the bank.) "As an active shareholder, we are in discussion with the management of the bank to resolve these issues," Mr Patwardhan said. In a letter to the bank's Chairman, Mr Satish Marathe, Duke Advisors has sought a meeting with the management to discuss the possibility of a board position for Duke.
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