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LVB shareholders seek relief

| Updated on November 22, 2020 Published on November 22, 2020

 

Caught off guard by the RBI’s move last week, the dismayed retail shareholders of Lakshmi Vilas Bank, who will lose their entire money, are looking to the market regulator and the bourses for help.

As per the scheme of amalgamation of LVB with DBS India, the entire paid-up share capital will be written off. That means, the value of current shareholders’ holding has become zero overnight.

Besides, the shareholders of LVB will also not have any say in the amalgamation decision in the general body meeting under the Companies Act, as the Banking Regulation Act, a special Act, will override the provisions of a general law. So, shareholders are now looking to SEBI and the BSE/NSE to compensate their loss from the Investor Protect Fund.

According to them, while the RBI has protected the depositors’ capital, it is for SEBI to proactively help shareholders.

Hidden meaning

The devil is in the details, and when the details are legalese, they become even more challenging to interpret. And taking full advantage of this are the government notifications and circulars. Since all such notifications/circulars are vetted by the Law Ministry before being made public, many a time the even officials in the administrative department find it difficult to understand the language used.

The latest example is the draft rule on Occupational Safety, Health and Working Conditions Code, one of four labour codes. For instance, the details about working-hour cap are such that even labour unions will not find them easy either to understand, forget challenging them at judicial forums.

An expert points out that, now a worker in morning shift can be in premise for 12 hours as the next set of workers will be able to replace the morning one only when the place is vacated after 12 hours. This will lower the potential to give more employment. At the same time, one does not know what workers will do during the additional time spent at the factory.

Celebrating ‘Feluda’

Top Bengali scientists in policy circles were overheard lamenting about the loss of one Feluda as another Feluda was taking birth. Last week, India lost legendary actor Soumitra Chatterjee who played the iconic role of detective Feluda in movies by celebrated film-maker Satyajit Ray. A week after, India celebrated the launch of Feluda paper strip for Covid-19 test based on CRISPR technology. The scientists in Health Ministry corridors were discussing the coincidence of Chatterjee’s death, his screen namesake and the innovation.

Dressing down

Is the DHFL resolution process getting murkier? The RBI-appointed administrator in the DHFL resolution process was left red-faced this past week when one of the advisors to the Committee of Creditors allegedly played mischief and took a different stand. This advisor is understood to have told the counsel of Union Bank-led consortium to pitch for deferment of the ongoing NHB case before the NCLT against DHFL till December 3.

The advice given out was that the consortium should agree for an NCLT direction, wherein the resolution process should continue but no voting should take place. On its part, Union Bank had conveyed at the CoC meeting this past week that it never asked its counsel to take this stand and that the counsel had gone with the advice of the advisor.

The main grouse of the administrator Subramania Kumar was that the company and its counsel — who is also before the NCLT in the NHB case — was kept in the dark about the stand. The NCLT is understood to have told the company as to why it should object to deferring the NHB matter to December 3 when the CoC itself had no objections to it. It is because of the advisor’s stand that the NCLT passed a remark that the resolution professional (administrator) seems to have a different agenda.

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Published on November 22, 2020
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