Dhanlaxmi Bank Shareholders Reject Appointment of Auditors

Moneylife Digital Team 30 September 2021

The twists and turns for Thrissur-based Dhanlaxmi Bank do not seem to end. At the annual general meeting (AGM), the lender’s shareholders rejected the appointment of its statutory auditors and branch auditors. The shareholders also refused to give authorisation to the board of directors of Dhamlaxmi Bank to appoint and fix remuneration of auditors.

Out of the 7.28 crore valid votes, over 65% or 4.76 crore voted against the proposal to appoint B Vijayaraghavan & Co as statutory auditors and authorise the board to fix the firm’s compensation.

While approving audited financial results, the shareholders passed a resolution to re-appoint CK Gopinathan. Mr Gopinathan and his two family members together hold close to 10% stake in the Bank.

Last week, three people, including former directors, had filed a petition in Kerala High Court (HC) seeking a seat on the Bank’s board. Dhanlaxmi Bank’s shareholder KN Madhusoodan, and P Mohanan and Prakash DL have approached the HC seeking a direction to Reserve Bank of India (RBI) and Dhanlaxmi Bank to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The petitioners allege that their candidature for board was rejected even when the nomination committee had cleared the proposal. The proposal also included reappointment of B Ravi Pillai, who holds a 10% stake in Dhanlaxmi Bank.

At present, there are four non-executive directors, two additional directors, who the RBI nominates, and the managing director (MD) on the board of Dhanlaxmi Bank. G Subramonia Iyer is the part-time chairman of Dhanlaxmi Bank. CK Gopinathan is the director, while Dr Capt Suseela Monon R and G Rajagopalan Nair are independent directors. RBI had nominated Dr G Jagan Mohan and DK Kashyap on the Bank’s board. Shivan JK is the managing director and chief executive (CEO) of Dhanlaxmi Bank.

Last year in September, Dhanlaxmi Bank’s MD and CEO Sunil Gurbaxani was voted out by shareholders during the AGM. Mr Gurbaxani was appointed as MD and CEO of the Bank for three years, from 27 February 2020.

The ordinary resolution moved for Mr Gurbaxani’s appointment was defeated, with 90.49% of the votes polled against the proposal as per the regulatory filing. Only 9.51% of the votes were polled in favour of his appointment. (Read: Dhanlaxmi Bank’s RBI-appointed MD Sunil Gurbaxani Voted Out during AGM)

In June 2020, Sajeev Krishnan, part-time chairman and independent director, another independent director KN Murali and G Venkatnarayanan, who was additional director, had resigned from the board of Dhanlaxmi Bank citing personal reasons. All three had worked at senior levels on the State Bank of India (SBI) group and had a good track record.

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