BoR withdraws move to induct Tayal as director

The controversy over its founder promoter P K Tayal, who was banned by market regulator Sebi from the securities market for false reporting of the bank’s promoter shareholding, has cast a shadow on Bank of Rajasthan’s extraordinary general meeting here today. The shareholders withdrew the proposal to appoint six new members, including Tayal, on the private sector bank’s board of directors.

The EGM lasted for about an hour amid tight security.

Asked if he would push for his for directorship, Tayal, said: “We have 21 days to reply to the Securities and Exchange Board of India on its ex-parte order. Let us first clear the doubts (of Sebi).”

Sebi had barred 100 entities belonging to the Tayal Group and its associates from accessing the securities market.

In February, the Reserve Bank of India had imposed a fine of Rs 25 lakh on BoR for violating regulations. The grounds for the fine included violation of RBI directions on acquisition of immovable property and deletion of records in the bank’s IT system.

Rating agency ICRA had also downgraded its tier II bonds. This was done partly for not making provisions for wage revisions, while most other banks had kept aside funds for the same. The rating downgrades reflect deterioration in the quality of BoR’s advances portfolio that had reported higher than expected restructuring, its relatively higher exposure to sensitive sector like real estate and textile and low net profitability over the last few quarters.

Shareholders today cleared a proposal to raise capital up to Rs 250 crore from institutional investors, paving the way to bolster capital adequacy for supporting business growth. The capital-raising proposal was passed unanimously. The bank stock closed higher by 0.84 per cent at Rs 60 on the Bombay Stock Exchange.