The DBOO has appealed to the new management to undo the damage done in the past three years by the previous team. This apart, the All India Bank Employees Association has appealed for merging Dhanlaxmi Bank with another public sector bank
Dhanlaxmi Bank Officers Organisation (DBOO), the trade union of the bank has hit out hard on the recently resigned managing director (MD) and chief executive officer (CEO) Amitabh Chaturvedi and its management for the poor plight of the bank and meticulously hiding all the facts from the public.
In a circular issued, DBOO said that the bank which booked profit of Rs57 crore in 2009, is about to show dismal result for the December 2011 quarter. The union has also refuted all stories published in the media crediting Mr Chaturvedi for the growth of the bank.
According to DBOO, “The leading business daily Economic Times dated 6th
February reported the plight of the ex-MD who had increased the total business from Rs6,500 crore to Rs24,000 crore, who raised the pay and performance linked bonus, resigning from the bank embittered by the actions of notorious trade unions! Shed your crocodile tears for the MD. What a brilliant show management.”
It adds that, “The former MD, Amitabh Chaturvedi was even claiming the credit for 100% core banking implementation which in fact happened years before he took charge of the bank. How cleverly the management hid the continually dwindling profit of the bank from public view.”
The circular states that the MD’s decision to resign ahead of its quarterly results announcement is a sign of more trouble for the bank. In fact, the DBOO also accused the media management team for projecting a growth story when the bank was in dire straits.
Contrary to the media stories stating that Mr Chaturvedi’s decided to quit due to his difference with the management, DBOO says that, “…the apex bank, RBI (Reserve Bank of India), showed its displeasure on the MD after getting the memorandum from the AIBOC regarding the health of the bank. It is common man’s guess that the MD has put in his papers due to the intervention of RBI because of his non-performance. However, he is still using his clout with the media to project himself as a martyr. A post mortem is needed to uncover the full dealings of the MD and his associates, right from October 2008 onwards.”
Moneylife was the first one to report the bruising battle between Dhanlaxmi Bank and its union. The All-India Bank Officers Confederation (AIBOC) alleged that the bank has manipulated accounts and provisioning, has a mismatch in asset-liability resources, maintains poor capital adequacy ratio and has huge dependence on call money borrowing. It has also accused the bank for ignoring social banking and financial inclusion. Subsequently, last year in November, the RBI conducted an inspection and issued a 15-point Monitorable Action Plan (MAP) to Dhanlaxmi Bank.
The trade union has also questioned the RBI for its inaction. “How could the banking regulator ignore the “early warning signals” and let the mismanagement continue for this long? Why this sudden reversal of fortunes: The bank that was making a profit till the last quarter, report a dismal performance, all of a sudden?” the DBOO said in a statement.
The DBOO has appealed to the new management to undo the damage done in the past three years by the previous team. This apart, the All India Bank Employees Association (AIBEA) has appealed for merging Dhanlaxmi Bank with another public sector bank.
A decade after the Ketan Parekh scam, the custodian appointed under the Special Courts Act has moved a petition seeking custody of all the money paid by him to Bank of India and Madhavpura Mercantile Cooperative Bank (Ahmedabad)
How did Ketan Parekh, the primary accused in the securities scam of 2000 according to the Joint Parliamentary Committee (JPC) report, manage to pay several hundred crore rupees to two banks, when he, as a notified party under the Special Courts Act of 1992, had declared negligible assets to the custodian? We may finally get an answer to this question.
On 1 February 2012— a good 11 years after the Ketan Parekh-led securities scam rocked the stock markets—the custodian filed an application (No 166 of 2011) against 19 companies of the Ketan Parekh group asking that all payments made by him to Madhavpura Mercantile Cooperative Bank (MMCB) of Ahmedabad and Bank of India, should be deposited with the custodian.
This surprise action, long overdue, for the first time will probably answer a key question that we at Moneylife have frequently asked: How did Mr Parekh make payments running into several hundred crores without a source of income and when he has been banned from the capital market by the Securities & Exchange Board of India (SEBI) for 14 years? How could these payments be a condition to let him out on bail?
The custodian lists 19 entities as being part of the Ketan Parekh group and includes some entities with whom Mr Parekh has frequent denied any association. It may be recalled that the MCCB had gone bust when it was discovered that Ketan Parekh, in cahoots with the bank’s former chairman and his son, had illegally obtained over Rs800 crore from the bank to fund his last ditch efforts to pull himself out of financial trouble.
The persons and entities named in the custodian’s application before the Special court are—Ketan Vinaychandra Parekh, Navinchandra Narbeheram Parekh, Mamta K Parekh, Panther Financial Capital Management Services, Luminant Investment Services Pvt Ltd, KNP Securities, Triumph Securities, V N Parekh Securities Pvt Ltd, Saimangal Investrade, NH Securities, Nakshatra Software Pvt Ltd, Goldfish Computers Pvt Ltd, Chitrakoot Computers Pvt Ltd, Manmandir Estate Developers Pvt Ltd, Panther Industrial Products, Triumph International Finance, Panther Investrade, Classic Credit, Classic Shares & Stock Broking. The list includes his wife, his father and all the companies that were considered to be a part of his trading empire during the late 1990s, when he dominated the market.
For those who have forgotten, the custodian was appointed after the securities scam of 1992 under the provisions Special Court (Trial of Offences relating to transactions in securities) Act, 1992. The statute was enacted, ostensibly to ensure a speedy trail of scam related offences, but nearly 20 years later, many of the cases filed in the early 1990s are still dragging in various courts. In the process, many of the guilty have not been punished, while some innocents are also condemned to a grinding litigation.
The custodian’s application says, “that it is beyond comprehension or even understanding that” that Mr Parekh could make such substantial payments subsequent to notification whereas the assets disclosed on 19 September 2003 were a negligible (Rs1.55 crore interest in shares). Mr Parekh had paid approximately “Rs72.2 crore to Madhavpura” between 28 August 2001 and 31 January 2005—most of it was after he had been notified. The custodian states that these payments were made without seeking the sanction of the Special Court.
The Custodian obtained this information while “going through various proceedings filed against” Ketan Parekh by Bank of India and MCCB had found “affidavits and pleadings” by Ketan Parekh, showing that he had “deposited various amounts” with these banks, subsequent to the date of his ‘notification’ under the Special Courts Act.
The custodian says that all the companies which made payments on behalf of Ketan Parekh “were front companies” as were the funds that were at their disposal. It asks how companies with a tiny shareholding could make payments that ran into crores of rupees. It also quotes a letter written by Ketan Parekh on 29 March 2001 to the chairman & managing director (CMD) of Bank of India which declares: “In any event, the business of all these entities were run by me only acting as a decision maker and the other family members though acting as signatories were not in the know of things.”
The custodian has sought direction of the Special Court for disclosure of the bank accounts opened by these entities post notification and their audit by the chartered accountant on an affidavit. It also wants the court to direct Mr Parekh to disclose “the source of funds in respect of the shares of the companies arrayed as respondents” in the list above.
The custodian’s action is making waves in the Special Court and most lawyers and others associated with the trial and investigations believe that it may lead to significant disclosures when the hearings begin.
(Sucheta Dalal is the managing editor of Moneylife. She has co-authored the best-selling books “The Scam: From Harshad Mehta to Ketan Parekh”; “AD Shroff: A Titan of Finance” and “Pathbreakers 1&2”. Based on her outstanding investigative journalism spanning over two decades, she was awarded the Padma Shri in 2006.)
“As per government estimates, total production for last year was 18.2 million tonnes. This year we expect a marginal decline and estimate total output of around 17 million tonnes,” says Bimal Kothari, vice-president of the India Pulses and Grain Association
Despite fall in the production of pulses, prices are expected to remain stable. However, the price of chana (gram), particularly, is likely to climb up by around 7% in April on the event of lower output due to erratic weather conditions.
“The current market is stable. Prices have been in the reach of common man. As per government estimates, total production for last year was 18.2 million tonnes. This year we expect a marginal decline and estimate total output of around 17 million tonnes— including Kharif and Rabi. Though there is no need to panic and worry,” says Bimal Kothari, vice-president of the India Pulses and Grain Association (IPGA).
According to IPGA, currently the price of tur (whole) is at Rs32, urad at Rs30, yellow peas is priced at Rs21. The price of chana is expected to go up by around 7% in April due to lower output. “Output of chana (gram) will be lower this year by about 10% as the crop was affected by adverse weather conditions in the main producing states of Andhra Pradesh, Karnataka and Maharashtra. The sowing of chana will soon begin in Madhya Pradesh and Rajasthan,” Mr Kothari said.
He adds, “Around 1 lakh tonnes of chana have been already imported from Australia.” India is the largest producer of pulses. Despite this it is also the biggest importer of pulses, from countries like Australia, Canada and Myanmar, consuming about 15% of the world pulses trade.
According to Mr Kothari, out of the total import basket, 50% is yellow peas, which is imported from Canada, Ukraine, Russia and France.
The IPGA expects annual imports to remain on the same level as last year despite the dip in the production. “Last year we imported 3 lakh million tonne. We expect the same this year, annually. In March imports generally rise by 5%-7%. This year it will be the same,” said Mr Kothari.
In fact, the IPGA is endorsing for exports of certain pulses depending on the output. “The government should allow export with certain directives and riders. For instance last year tur was in huge production, this time it is urad. So government can ascertain the production of various pulses and then allow exports,” explains Mr Kothari.