The names of PK Tayal and his group companies are not there anymore as promoters of Bank of Rajasthan. In fact, there is no promoter mentioned for the Bank on either the BSE or NSE site
Bank of Rajasthan (BoR), which is in the news for its proposed merger with ICICI Bank Ltd, has been embroiled in various controversies in the past. While market regulator Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) had cracked the whip on the erring lender, the exchanges, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), seem to be unaware of the filings from BoR.
According to both BSE and NSE sites, PK Tayal and his associated group entities are no longer the promoters of BoR. In fact, as per BoR's filing to the exchanges, there is not a single promoter mentioned for the period to end-March 2010. Surprisingly, names of PK Tayal and eight of his group companies are there under the promoter and promoter group for the quarter ending December 2009.
The Tayal group entities such as 21st Century Entertainment Ltd, Ahmednagar Investments Pvt Ltd, Cumballa Hill Property Developers Pvt Ltd, Cyber Infosystems & Technologies Ltd, Cyberinfo Zeeboomba.Com Ltd, EDC Securities Ltd, Giriganga Investments Pvt Ltd and Sumander Property Developers Pvt Ltd, together still hold 28.61% stake in BoR. However, their names are mentioned in the “public and holding more than 1% of the total shares" category, instead of the "promoter and promoter group" category. In its ex-parte order, SEBI has labelled all these companies as ‘promoter entities of BoR’.
A note posted by BoR on the BSE site said: "Hitherto, Tayal Group holding was shown in the Promoter Category. Based on the legal opinion obtained, they are no longer being treated as Promoter of the Bank. In the absence of any other category for the dominant shareholders group (DSHG), their holding has been shown in the Public Category."
"The declared shareholding of Tayal Group is 28.60%, however, as per SEBI ex-parte interim order dated 8 March 2010, holding of Tayal Group and related entities are to the order of 55.01%," the note says.
The question is how can any group or entity be removed suddenly from one category and placed into another category? That too when the market regulator has clearly said that all these companies are "a promoter entity of BoR". More importantly, is there anyone in the exchanges who keeps a tab on the regulatory filing done by companies? When asked, after more than 24 hours, the BSE asked us to check the lender’s filing on its site.
Following the SEBI ban on about 100 entities related with the Tayal Group, BoR's managing director and chief executive officer, G Padmanabhan, had said that 'technically' the Tayals were not the Bank’s promoters.
"Legal opinion has been obtained that they are not the promoters. The Bank does not consider them as its promoters. They are just dominant shareholders in the bank," Mr Padmanabhan had said.
SEBI was peeved that the Tayals had increased their shareholding in the private sector lender to 55.01% in the October-December quarter of 2009 from 44.71% in the quarter ended June 2007, although they had claimed that they were actually divesting stake. The market regulator also said that while the promoters apparently conveyed the impression that they were reducing their shareholding, they did not, in fact, dilute their controlling stake in BoR.
The SEBI action against the Tayal Group itself came after the RBI appointed Deloitte Haskins & Sells to conduct a special audit of BoR's accounts, suspecting violation of operational norms by the lender, including transparency in lending. The RBI had also imposed a Rs25-lakh fine on the Bank alleging violation of a host of norms.