Ujjivan Small Finance Bank is seeking to get its house in order after the sudden announcement of the exit of its Managing Director and CEO Nitin Chugh last month, and the old order is likely to make a comeback at the lender.

Three independent directors including BA Nambiar – Chair Designate, Ujjivan SFB, Rajni Mishra – Chair of Risk Committee, and Ravichandran Venkataraman – Chair of Nomination and Remuneration Committee, are a part of the RBI approved Special Committee of Directors to oversee the operations and administration of the bank, Samit Ghosh – Common Director on Ujjivan SFB and Ujjivan Financial Services told BusinessLine in a message. He, however, did not respond to requests to speak further on the bank.

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“It looks like the old order strikes back with Samit Ghosh wanting to retain control of the likely merged entity. The Reserve Bank of India has now allowed merger with holding companies,” noted an expert who did not wish to be named.

“Bank has started working internally along with the Holding Company to initiate various steps for effecting the reverse merger,” Chugh had said in the annual report.

Significantly, Carol Furtado who has been appoitned as Officer on Special Duty (OSD) and will then take charge as Interim CEO, has been a part of the Ujjivan Group since 2005 and was designated at Ujjivan SFB as Head of Operations and Service Quality. Subsequently, she moved into Ujjivan Financial Services, serving as the CEO.

Annual general meeting

The lender is scheduled to hold its annual general meeting on September 27 where it will have to address shareholder queries on reasons for top level exits from the management.

The AGM has also sought shareholders’ approval to appoint Samit Ghosh and Sudha Suresh as non-executive non-independent directors and appointment of Rajni Mishra, Banavar Anantharamaiah Prabhakar, Rajesh Kumar Jogi and Ravichandran Venkatarama as independent directors on the board of Ujjivan SFB.

The bank’s management has remained tight lipped about these recent developments, although there have been indications that some felt there was undue interference from the holding company – Ujjivan Financial Services.

Ujjivan SFB did not respond to a query from BusinessLine on the issue.

Chugh’s resignation

In a stock exchange filing on August 19, Ujjivan SFB had said Chugh has tendered his resignation as MD and CEO citing personal reasons. He will step down from the role on September 30.

Analysts had noted at the time that while the press release indicated that Chugh’s resignation was due to personal reasons, the impression from the analyst call was that it was mainly due to the bank’s persistent under performance on the asset-quality front, delayed recognition and correction of NPAs in MFI, and large-scale attrition at the lower-middle level.

“In our view, apart from the bank’s under performance, some niggling issues with the old management and his incompatible new-age management style in the still MFI-dominated old school bank, could also have contributed to the resignation,” Emkay Global had said in a note last month.

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