Dhanlaxmi Bank: Director K Jayakumar exposes top brass while resigning
In his resignation letter, the former Chief Secretary of Kerala alleged harassment and subsequent removal of dissenting independent directors for not toeing up the line by Dhanlaxmi Bank’s CGM Manikandan and MD & CEO G Sreeram
 
K Jayakumar, a retired Indian Administrative Services (IAS) officer, and former Chief Secretary of Kerala government has resigned from troubled Dhanlaxmi Bank. The IAS officer's hard hitting letter exposes the lack of proper management at the Bank, but also questions the role of banking regulator, Reserve Bank of India (RBI). 
 
The background to this is the anger and unhappiness of employees following the abrupt termination of PV Mohanan,  General Secretary of Dhanlaxmi Bank Officers' Organisation (DBOO) in June 2015, without specific reasons. Sources at the bank insist that the real reason for his removal was the expose of a fixed deposit scam to the tune of Rs240 crore that is being investigated by the Economic Offences Wing (EOW) of the police. The Bank employees struck work for 33 days at that time causing the government to intervene in the matter. But clearly, the mood at the bank as well as its method of managing things are far from conducive, as is evident from Mr Jayakumar's resignation and the contents of his hard hitting exit letter. 
 
Mr Jayakumar says, "In this depressing atmosphere of self-deception coupled with utter lack of sensitivity and grace, and poor appreciation of the values of human resources management and industrial relations, my self-esteem does not permit me to associate any longer with Dhanlaxmi Bank as a Director. Alarmingly enough, the Bank's business is shrinking, its revival plans are wobbling, its employees are alienated and frustrated and its HR policies and practices are amorphous and antiquated. Where an all-out effort to galvanize the Bank by enlisting the total cooperation of the staff to achieve a turnaround would have been a natural instinct, Dhanlaxmi Bank, sadly enough follows a bullish HR policy characterized by insensitivity and intimidation. Will arbitrary transfers, termination, selective rewarding of loyalty and such myopic strategies, which belie all modern human resources (HR) practices, bring glory to a Bank, which has not been able to post a profit in the past several years? As a Director, I feel helpless and sad. For the above reasons, circumstances and facts, I resign from the Board of Directors of Dhanlaxmi Bank". 
 
The former Chief Secretary also highlighted harassment meted out to a dissenting director by the Bank's Chief General Manager Manikandan, in particular and G Sreeram, Managing Director and Chief Executive, to a lesser extent. When Mr Jayakumar raised objections on unceremonious removal of PV Mohanan, who was working as Senior Manager in the Bank's Recovery Department at Thrissur, citing 'loss of confidence', he says, he "began to realize the outdated, if not feudal mind set of the top management, particularly Mr Manikandan, the CGM and to a lesser extent Mr Sreeram, CEO and MD".
 
"They seem to presume that the Directors have to be necessarily 'yes men'.  Any note different from 'his master's voice' is unacceptable. 'Dissent with dignity' seems to be unknown in their lexicon. Once a Director (who is paradoxically called Independent Director!) is suspected to have different views, then he has to be side lined if not humiliated. Then the transport department and other functionaries are instructed not to show elementary courtesies even about firming up travel plans for attending the Board meeting. Then that Director has to be removed from important Committees. Then it becomes a tested ploy to convey, in not so subtle ways, how poorly RBI thinks of him. This style was in evidence when a former Director, Mr K Vijayaraghavan, who used to dissent and often criticize, was shunted out of the Board last year as his re-nomination failed to receive support from the majority of shareholders!," Mr Jayakumar stated in his resignation letter.
 
Earlier in November 2014, while raising the issue of removal of Mr Vijayaraghavan with the RBI, the All India Bank Officers' Confederation (AIBOC) too had alleged misuse of power from the top management. AIBOC, in the letter had stated, "The case of removal of K Vijayaraghavan (former Director) is a classic example. At any time, the Board can oust the Chairman also by similar lobbying and may suggest the name of their own person as Chairman. Instead of the Chairman and the directors determining who should be the MD and CGM, it is happening vice versa- MD and CGM are selecting the Directors and the Chairman of the Bank. By selecting the directors by this mode, there is big erosion in the 'independent director' concept in Dhanlaxmi Bank. This is a dangerous trend because the much needed 'checks and balances' in the Bank's administration will be missing. This is a systemic issue, which has to be addressed and set right."
 
"Though the Bank could increase the capital substantially, the disadvantage is that the top two executives of the Bank, the present MD and CGM could develop a liaison with the investors, as it was they, who were negotiating with the big investors for investment in the Bank through private investments in public equity (PIPE) or qualified institutional placement (QIP). Using this clout the present MD and CGM determine who shall be the Director of the Bank," the Officers' union had alleged. 
 
Although the Officers’ Confederation sent the letter to the RBI in November 2014, nothing much seems to have changed in Dhanlaxmi Bank. Here is the letter sent by AIBOC to the RBI…
 
 
In his resignation letter, Mr Jayakumar further said, "...I have lost faith in the capacity of this management and its ethos that has missed the wood for the trees. I wonder why the initiatives approved by the Board and the several suggestions and admonitions of the RBI have repeatedly failed to yield the desired results. I am shocked by the abysmal lack of grace in dealing with difficult situations that ought to have been handled with sagacity and foresight. I am pained at the short-sightedness that fails to regard the commitment and contentment of the employees as paramount for the survival and success of the Bank in its darkest hour".
 
Commenting specifically on the dismissal of PV Mohanan, the IAS officer mentioned that he always had been a strong critic of the union leader, but never doubted personal integrity of Mr Mohanan. "I am no trade union leader holding a brief for Shri Monahan. But as an officer in the civil service for three and a half decades and having had several opportunities to deal with powerful trade unions and service organizations, I am of the view that the action of the management has been unfair and unjustifiable. The punishment of termination is unequal to the offences committed. What is the offence that has made nothing but dismissal from service the only befitting punishment? What is the public/ organizational purpose this act has achieved? The only message it conveys to the employees is ominous and depressing.  When the Bank is going through critically difficult times, any decision that fails to elicit the willing support and goodwill of the employees is unwise and short sighted.  A decision that does not have a direct or indirect beneficial impact on the institution cannot be morally justified. The insistence that Mr Mohanan should be forced out ignominiously has not served any productive purpose other than alienating the employees. This has been nothing but a thoughtless act that only vindicates the obstinacy of the management and has resulted in hardship and personal injustice for an individual. The decision epitomizes utter disregard to the morale of the employees," Mr Jayakumar had said.  
 
Our emails sent to the Bank's MD & CEO remained unanswered till writing this story. We will incorporate Dhanlaxmi Bank's comment as and when we receive it.
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    COMMENTS

    Ram Mohan

    4 years ago

    It is all interesting to note the fall of this private bank. But the writer is one director and we would like to know the views of others in the issue. Otherwise it can only be considered as a tactic to blame someone who was a partner in looting but the partnership became sour later. Government again failed to protect the public funds and am sure some of the ruling party too might be involved in sharing the booty.

    PRAKASH D N

    4 years ago

    Kudos to Moneylife Team for exposing the hallow Corporate Governance in Private Sector Banks. P J Nayak Committee report recommends reduction
    in Government control and doing away with dual control of Govt. and RBI in
    PSBs for better governanace. Is the Dhanalakshmi type Board Governance is required for PSBs? In spite of the issue had been brought to the notice of RBI (by AIBOC), what the RBI has done? I learn that there are two RBI Directors on the Board of the DB. Were they remain mere spectators? If this is the
    fate of Independent Directors in DB, it is high time RBI does a corporate governance audit of all the Banks. The way the Management deals with its human resource is fully reflected in the dismissal of the General Secretary
    of officers' union (for whistle blowing) and how it handles a IR crisis. No need to search for the losses Bank is incurring for the past few years? Is there no accountability for the MD and other Board members? Are they not accountable to the share holders and depositors? RBI need to intervene to put the Bank on the right track.

    SuchindranathAiyerS

    4 years ago

    An Edward, an Edward come to confession? But the very fact that this is dripping from the mouth of a Bureaucrat who must have been privy to the millions of crimes, that each Babu must countenance, and which, in their aggregate, make up the Indian Republic points to one simple fact. The Dhanalakshmi Bank, like Mr. Jayakumar himself, is just another fractal of India.

    MG Warrier

    4 years ago

    Perhaps, we need to give more thought to mature views like "...I have lost faith in the capacity of this management and its ethos that has missed the wood for the trees. I wonder why the initiatives approved by the Board and the several suggestions and admonitions of the RBI have repeatedly failed to yield the desired results. I am shocked by the abysmal lack of grace in dealing with difficult situations that ought to have been handled with sagacity and foresight. I am pained at the short-sightedness that fails to regard the commitment and contentment of the employees as paramount for the survival and success of the Bank in its darkest hour" expressed by Jayakumar. Issues can get diverted and the seriousness can get diluted by dragging Subramanian Swamy's comments on Dr Rajan. Swamy has spoken a lot more after he had suggested a replacement for Dr Rajan and Dr Rajan has given many speeches after he had used 'Dosa' prices to explain inflation. Let us also move forward and think about proactive suggestions that can save the system.

    Raja Laks

    4 years ago

    RBI Governor who used to comment about Dosa has not opened his mouth yet about this Bank.

    Ultimately Banks come under Arun Jaitley ministry, so no hope. Earlier it was under the biggest thief P Chidambaram.

    REPLY

    Suketu Shah

    In Reply to Raja Laks 4 years ago

    Mr Rajan was appointed by PC and hence is obligated to him.No wonder you see this kind of performance(or rather lack of it) from him.Dr Swamy clearly stated 1 yr ago rajan has to go and fast and wait for more such inaction by RBI to come out now that Rajan's term is getting over

    Suketu Shah

    In Reply to Raja Laks 4 years ago

    Perfectly said.What else can you expect of a man like Rajan who one of our topmost honest leaders Dr Swamy had stated 1 yr ago that he had to go and fast.Rajan has only lived up to our expectations.

    Kishore Biyani resigns as Future Retail managing director
    The resignations would be effective from the closing business hours of May 1, the company said
     
    Future group chairman Kishore Biyani resigned from the post of managing director of Future Retail Ltd (FRL) as a part of rearrangement of the group's business, the company said on Monday.
     
    The retail giant said Rakesh Biyani also resigned from the post of joint managing director as well as director of the company as part of a restructuring to carry out the merger with Bharti Retail with the company announced last year.
     
    However, Kishore Biyani would continue to hold office as non executive director of the company, the company said in a BSE filing.
     
    The resignations would be effective from the closing business hours of May 1, the company said.
     
    In May last year, the Future group approved the consolidation and realignment of its retail operations with Bharti Retail Ltd to form one of the biggest supermarket chains.
     
    In order to streamline the operations resulting from the consolidation, the respective board of directors had proposed to demerge the retail business of Future Retail to Bharti Retail and to demerge the infrastructure business of Bharti Retail to Future Retail.
     

    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

     

  • User 

    COMMENTS

    R Balakrishnan

    4 years ago

    Creator of the biggest loss making businesses in India. But a lot of bluster and con to keep pulling it off again and again Truly India's miracle man!

    Automobile makers begin new fiscal on positive note
    Chennai/Kolkata/New Delhi: Indian automotive makers opened the new fiscal with positive sales growth while hoping for a favourable verdict in the apex court over the sale of diesel engine-powered vehicles.
     
    India's largest car maker Maruti Suzuki India Ltd logged 13.3 percent rise in its sales volume.
     
    The company sold 126,569 units (domestic 117,045 units, exports 9,524 units) in total, as against 111,748 units (domestic 100,709 units, exports 11,039 units) in the corresponding month last year, the company said in a statement.
     
    Among car segments, the sales of the mini, compact, super compact and mid-size passenger cars grew only 2.7 percent in April while the company's sales in utility vehicles rose by a whopping 260.4 percent.
     
    Maruti Suzuki sold 16,044 units of utility vehicles in April as against 4,452 units in the same month last year.
     
    On its part, India's second largest car maker Hyundai Motor India Ltd sold 54,420 units (domestic 42,351 units, exports 12,069 units) last month as against 51,505 units (domestic 38,601 units, exports 12,904 units) during April 2015.
     
    According to Rakesh Srivastava, senior vice president for sales and marketing, the company continued its growth momentum, logging 9.7 percent volume growth last month at a time when the industry is facing challenges on rural sales, and sales on diesel vehicles.
     
    Similarly Mahindra & Mahindra Ltd. (M&M) logged 14 percent higher sales at 41,856 units last month as against 36,727 units sold in April 2015.
     
    President and chief executive Pravin Shah expressed happiness over the growth in sales.
     
    He hoped that the apex court would take into account the role of the automotive industry in the industrial growth while deciding on the ban on diesel vehicles in the national capital region (NCR).
     
    Commercial vehicle maker VE Commercial Vehicles (VECV) posted 36.5 percent growth in total sales in April at 5,365 units as against 3,930 units sold in the same month last year.
     
    The company, a joint venture between Sweden's Volvo Group and Eicher Motors, said Eicher-branded trucks and buses registered total sales of 5,326 units (domestic 4,641 units, exports 685 units) in the last month compared to 3,838 units (3,503 units, exports 335 units) in the corresponding month last year.
     
    The company sold 39 units of Volvo trucks last month compared to 92 units in April 2015.
     
    Similarly, Ashok Leyland Ltd. said it sold 10,180 units last month up from 8,435 units in April 2015.
     
    On the two-wheeler side, Eicher Motors Ltd reported sales of 48,197 units (domestic 47,037 units, exports 1,160 units) up from 33,918 units (domestic 33,118 units, exports 800 units) sold in April 2015.
     
    However, two- and three-wheeler maker Bajaj Auto Ltd. went on the reverse gear last month selling 330,109 units down from 336,274 units in April 2015.
     
    The company's sales of commercial vehicles last month went down by 24 percent to 38,211 units as against 50,483 units in April 2015.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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