Mumbai
The 11 shareholders of Dhanlaxmi Bank who have requisitioned an extraordinary general meeting (EGM) on June 12 for a detailed discussion on the Bank’s third-quarter financial position, may have to seek convening of another EGM for passing a resolution on the corrective steps they feel the Bank should take.
The EGM notice only seeks a detailed discussion on the financial position of the Thrissur- headquartered Bank concerning the third quarter. There is no resolution that will be put to vote.
As per the notice of Dhanlaxmi Bank’s June 12 EGM: “The Bank is passing through the financial crisis as is evident from the results for the quarter ended December 31, 2021 and the Cost to Income Ratio has risen to an alarming proportion. The Bank does not have any effective control over expenditure, especially Legal and Administrative.
“The Bank is going to start new branches and recruit fresh personnel even though the CAR (capital adequacy ratio) of the Bank has been adversely commented by the RBI. A detailed discussion on the financial position of the Bank especially the abnormal increase under expenditure has to be initiated by the Bank.”
Interestingly, while the 11 shareholders’ (members) made their requisition for holding an EGM on March 28, 2022, the same was received by the Bank only on April 28, 2022.
Among the 11 shareholders’ who sought the EGM on June 12 include B Ravindran Pillai (holding 9.99 per cent of the paid-up capital of the Bank), B Govindan (1.51 per cent), Hareendran C K (1.38 per cent), Jinsha Nath C K (0.78 per cent) and Rajesh K (0.01 per cent).
Market experts say it is a bit puzzling that the shareholders’ put in their requisition for EGM to discuss the Bank’s third-quarter (Q3) financial position only towards the end of the fourth quarter (March 28), given that Q3 results were declared on February 11.
They emphasised that a full year financial performance discussions will any way be part of the discussions at the Annual General Meeting (AGM).
Makarand M Joshi, Practicing Company Secretary, said: “The shareholders have not been able to address the time value of the discussion. This discussion should lead to some action. And action should be the agenda of the notice.”
Meanwhile, the Reserve Bank of India (RBI) may appoint one more additional director on the Board of Dhanlaxmi Bank despite the Board’s strength declining to five from eight, even as prominent shareholders are seeking to assert their right to nominate their representatives on the Board.
While the bank posted a robust 344 per cent year-on-year (yoy) jump in the fourth quarter (FY22) net profit at ₹23.42 crore (₹5.28 crore in the year-ago period), the central bank may want to ensure that its functioning is on an even keel by possibly inducting an additional director, according to sources.
The 95-year old private sector bank reported a marginal (1.29 per cent yoy) decline in FY22 net profit at ₹35.90 crore (₹37.19 crore in FY21).