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In a major relief to Dhanlaxmi Bank, a Division Bench of the Kerala High Court upheld the appeal filed by the lender against writ petitions filed by four petitioners – namely KN Madhusoodanan, P Mohanan, PK Vijayakumar and Prakash DL, who are also shareholders of the bank.
In 2021 when their reappointment to the board did not materialise, they challenged the decision at the Kerala High Court, which was initially heard by a single member Bench. When the verdict went in favour of the shareholders, the bank challenged the same and now the two-member division Bench has upheld the stand of Dhanlaxmi Bank.
Stating that appointment to the board requires the candidates to pass the Reserve Bank of India’s fit and proper conditions, the court has upheld that writ petitions filed by the shareholders are not maintainable. To ensure that the shareholders do not further appeal on matter, the bank is expected to file caveats in the Supreme Court
Go-ahead for fund raise
The favourable court verdict paves way for the bank to go ahead with the right issue of ₹131 crore planned in June. “As a first step, vacant positions at the board will be filled, including that of a woman director,” said a person aware of the matter. Once the quorum is in place, the board will approve the rights issue and the bank plans to approach the Sebi to expedite the process. businessline had reported on October 17 that the RBI has increased its oversight on the bank. “If the capital raise happens within a reasonable time, the bank may be out of the tight monitoring purview. But its still too soon to say that the position is comfortable at Dhanlaxmi Bank,” said a person aware of the matter.
Meanwhile, shareholders of the bank have called for an extra-ordinary general meeting on November 12. The agenda of the meeting is to authorise CK Gopinathan, a shareholder, to reach settlement with the petitioners. With the current verdict in favour of the bank, the need for this agenda may not arise. Also, the shareholders seek to suspend the powers of JK Shivan, the bank’s MD & CEO. The last time when the EGM was called for (in June 12) it turned out to be a damp squib.
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