Dhanlaxmi Bank's RBI-appointed MD Sunil Gurbaxani Voted Out during AGM

Moneylife Digital Team 30 September 2020

Economy & Nation

Thrissur-based Dhanlaxmi Bank's managing director (MD) and chief executive officer (CEO) Sunil Gurbaxani has been voted out by shareholders during the annual general meeting (AGM). Over 90% votes went against the resolution to approve appointment of Mr Gurbaxani as MD and CEO of the Bank. This clearly is a snub for the Reserve Bank of India (RBI), which had approved the appointment of Mr Gurbaxani for three years as MD and CEO of Dhanlaxmi Bank, in February.

During the AGM, institutional investors fully backed the proposal. However, rest of the public shareholders voted against it. Out of the total 8.01 crore votes, 76.21 lakh votes were in favour, while 7.25 crore votes were against the proposal of approving Mr Gurbaxani's appointment.

While rejecting Mr Gurbaxani's appointment, the shareholders approved re-appointment of CK Gopinathan as director of the Bank. The AGM also approved with majority, the proposals to appoint G Subramonia Iyer, Dr Capt Suseela Menon R, G Rajagopalan Nair and PK Vijayakumar as independent directors of Dhanlaxmi Bank. CK Gopinathan holds 7.5% stake in the Bank, as per the Dhanalaxmi Bank's March 2020 shareholding. B Ravindra Pillai with 10% and Kapil Wadhawan with 5% are the two other big individual shareholders of Dhanlaxmi Bank.

Earlier in June this year, 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 State Bank of India (SBI) group and had a good track record.

As per media reports, following lobbying, infighting at the top and an exodus from the Dhanlaxmi Bank board, RBI wrote a letter asking them to terminate a chief general manager of the Bank. It’s unprecedented for RBI to intervene and terminate the services of CGL-level officer. However, a similar alacrity and intervention has been missing in many bigger banking debacles such as Yes Bank and Punjab and Maharashtra Cooperative Bank.

Dhanlaxmi Bank was removed from the RBI's prompt corrective action (PCA) framework, subject to certain conditions and continuous monitoring, as the Bank is found to be not breaching any of the risk thresholds of the framework.

This is the second private bank where the shareholders have voted against the appointment of the MD and CEO in recent days.

Earlier, the shareholders of Lakshmi Vilas Bank (LVB) had voted out seven directors, including the MD and CEO, in its AGM.

Comments

User

ssangeeth155

4 years ago

No body here is mentioning on the real cause of all these undesired happenings. Itâ€™s Manikandan the former CGM who was ousted by the RBI due to his behaviours that doesnâ€™t fit the ethics of. Or prorate governance. Any further doubt call 91 94471 2323*

mahesh.bhatt

5 years ago

Where is Laxmi going men? Dhan to Aishwarya to Santan to Daridra conversions? Chanchal as accounts to costs to stocks to shares to finance to tax to auditors to convert Engineers Drs watch amazingly & Lawyers fight easily to win
Rgds Mahesh Bhatt

Ramesh Popat

5 years ago

Gopinath and Wadhwan- big defaulters?
what about pillai?

rajuhalwai.rh

5 years ago

At the end Depositors money is importantant. If shareholders or management donot accept RBI's ruling then who will save depositors? If matter gets worst then mean time depositor will shift to other bank and borrowers will stop cooprating for recovery. it has happened with many other co-op banks. Rather it is better to agree with Boss otherwise difficult to save bank.

rajoluramam

5 years ago

Because of the indecisive attitude of RBI, slowly many small banks like
Dhana lakshmi bank, LVB on the verge of closure. When smell comes about the deminishing returns of the banks, RBI should take quick and prompt action to put these banks in the right direction. Had the RBI has allowed the merger of LVB with Indiabulls last year, the position of LVB would not have been deteriorated to such a worst extent.
RBI thy name indecisiveness.

sundarbtw

Replied to rajoluramam comment 5 years ago

40 odd scheduled commercial banks are there in India. How RBI can micromanage each bank. Only employees are affected in these banks and rightfully so. Deposits are miniscule in these banks. These deposits are also used as collateral by borrower for loans in banks. RBI should allow demise of these banks itself so that employees in future do t sit like a duck...