Despite reports that Srikrishnan H had resigned as MD and CEO of Karnataka Bank Ltd, he attended the conference of All-India Karnataka Bank Employees’ Association in Mangaluru on Saturday evening, and said he is attending the programme in his capacity as bank’s MD and CEO.
Referring to media reports about his resignation, he said: “I am attending this programme as MD and CEO of Karnataka Bank. That is something you need to know.”
Karnataka Bank MD & CEO, Srikrishnan H, has put in his papers and June 30 will be his last working day in the bank, according to sources. However, there is no official confirmation yet on this.
Sources also said Executive Director, Sekhar Rao, is likely to submit his resignation in July.
Differences between Srikrishnan and the board on expenditure incurred by the bank beyond the delegated powers of the whole-time directors is said to be the reason behind his decision.
In their “Report on the Audit of the Consolidated Financial Results” on May 14, the statutory auditors of the bank -- Ravi Rajan and Co LLP and RGN Price and Co – had said: “We draw attention to Note 14 of the Standalone Financial Results, which states that the total expenditure includes an amount of ₹1.16 crore incurred in connection with engaging consultants & other revenue expenditure and total fixed assets include capital expenditure amounting to ₹0.37 crore, which were incurred beyond the delegated powers of the whole-time directors and was not ratified by the board.
“Consequently, the said amount is recoverable from the concerned directors. However, no effect has been given in the accounts in respect of the recoverable amount. Our opinion is not modified in respect of this matter.”
Srikrishnan H and Sekhar Rao are the whole-time directors of the bank.
Referring to the auditor’s report, an investor at the earnings call said: “I was looking at the report generated by the Chartered Accountants. So I see that emphasis of a matter which has noted that there was a Whole-Time Director who has used his delegated powers and then incurred some expenses and which was not ratified by the board. So can you explain or can you give some more information with respect to that please?”
Replying to this, Srikrishnan said: “It’s a very simple matter. The amounts are very insignificant, but it’s just the governance part, the bank had to take this into account. If there is anything which is incurred beyond the delegated authority, obviously there are explanations and making sure that those are either ratified or we will have to kind of make sure that the bank has a very conclusive part related to that, so that has been done and which is why it is a simple matter which is an emphasis of matter, which is normal and the amounts are not at all large.”
“We do have a policy and process, etc, but there was some kind of, I would say, interpretational or ambiguity in the policy, which has been corrected already. And we will ensure the same so that it doesn’t happen again,” he said.
A WhatsApp message and e-mail sent to Srikrishnan H seeking clarification on this matter were not replied till the time of the publication of this report.