Dhanlaxmi Bank shareholders seek to curb CEO spending powers; EGM on Nov 12

A group of nine shareholders of Thrissur-based Dhanlaxmi Bank have called for an extraordinary general meeting (EGM) of the bank on November 12, in a move to curb the spending powers of its chief executive officer.

The nine shareholders hold a total of around 13 per cent shares in the company. The group is led by R P Group head Ravindran Pillai, who holds a 9.99 per cent stake in the company. As per a notification, one of the resolutions, shareholders have sought the suspension of delegated powers exercised by the managing director and CEO regarding “all capital and revenue expenditure except statutory payments like salaries and wages, central and state taxes”.  

“All such suspended powers for incurring the expenditures, if any, shall jointly be exercised by any two non-executive directors of the Board during the above-mentioned period,” it said.  It further added that the powers will remain suspended till the date on which proper quorum and composition of the board of directors of the bank, audit committee, and other mandatory committees of the board are reinstated and the guidelines of Reserve bank of India and SEBI.

Through another resolution, the shareholders are also seeking a settlement on the issue of a legal battle with some shareholders regarding board positions. The current directors on the bank’s board are C K Gopinathan, a former director of Catholic Syrian Bank, who holds 10 per cent equity; Chief Executive Officer J K Sivan; independent director, G Rajagopalan Nair, an expert on fintech with a long experience in banking; and the two RBI nominees: DK Kashyap and Jayakumar Yarasi. 

In March this year, the high court stopped the bank from holding an annual general meeting for the appointment of directors, until the legal issues are sorted. Shareholders now want Gopinathan and Nair to be empowered to settle the dispute through negotiations.  A source said that the curbing of powers of the CEO may not be possible as per banking laws.