Dhanlaxmi Bank's Board appoints committee after shareholders oust CEO

Independent directors G. Subramonia Iyer, G Rajagopalan and P K Vijayakumar form the CoD. Iyer will be chairperson.

Dhanlaxmi Bank’s board has appointed a committee of directors (CoD) to manage the day-to-day affairs of the bank. The development comes a day after the bank’s shareholders voted against Managing Director and Chief Executive Officer Sunil Gurbaxani.
 
In an announcement to BSE, the bank said the RBI had, as requested by the board of directors, approved an interim arrangement for formation of the CoD to exercise the powers of managing director & CEO till such time a new MD & CEO takes charge.
 
As advised by the RBI, the interim arrangement would not continue beyond four months, within which the bank would complete the process of identification and appointment of a new MD & CEO.

 

The board appointed independent directors G Subramonia Iyer, G Rajagopalan, and P K Vijayakumar.
 
Sources and a shareholder at Dhanlaxmi also said the CoD would manage the day-to-day affairs till a new MD & CEO is appointed. While they claimed that Gurbaxani resigned after the shareholders’ vote against him, he was not available for comment.
 
Gurbaxani was appointed for a period of three years in February. His appointment was defeated with 90.49 per cent of votes polled against the proposal, according to a regulatory filing. Of the 10 resolutions moved at the AGM, shareholders passed nine and defeated one.

 
This is the second private bank where shareholders have voted against the appointment of the MD & CEO in recent days. On September 25, the shareholders of LVB voted out seven directors, including its MD & CEO.
 
However, while the RBI asked LVB’s directors to form a CoD the same day, it has been silent on Dhanlaxmi Bank.
 
Dhanlaxmi Bank posted a 69 per cent decline in its net profit at Rs 6.09 crore for the first quarter due to higher provisioning. On a sequ­ential basis, its net profit increased from Rs 2.6 crore in the March quarter.