Drama at BoR merger ballot

It was a day of drama for Bank of Rajasthan (BoR). The bank first cancelled an extraordinary general meeting (EGM) in Mumbai, following a stay order by a court in Kolkata. After which, shareholders themselves decided to convene and vote on the merger proposal with ICICI Bank; the outcome is not known. Minutes after the voting was done, ICICI Bank got the stay vacated by the Kolkata high court.

Three employee unions of BoR also began a three-day strike to protest against the merger. Meanwhile, ICICI Bank held its EGM peacefully, on the same merger issue, at Vadodara. The outcome of their vote will be known tomorrow.

Stay, defiance
At around 12.50 pm, BoR’s Managing Director and CEO G Padmanabhan received a letter from a Howrah-based advocate. It informed the bank about an order passed by a civil court in Kolkata, restraining the bank from holding the EGM. After consulting Fox Mandal, the bank’s solicitors, Padmanabhan decided not to go ahead with the meeting, according to a filing with the Bombay Stock Exchange.

The contents of the letter were read out to the gathering by the company secretary, after which Padmanabhan and other BoR executives left the venue.

The news of the cancellation drew noisy protests from shareholders. They decided to vote a chairperson and conduct a parallel shareholder’s meeting. The issue of the proposed merger was put to vote in a meeting chaired by a shareholder, Dinesh Vrijlal Lakhani.

After the vote, he told reporters the shareholders were empowered by law to conduct a meeting if the company’s directors were not present or unable to conduct it. At the time of going to press, the results of the vote were not known.

An ICICI Bank spokesperson later said: “The BoR EGM has happened. A lower court in Kolkata had issued an injunction against holding the EGM. The Kolkata high court has now stayed the lower court order.”

BoR shares were up 1.5 per cent at Rs 174.50 a share after hitting a 52-week high of Rs 178.80, while ICICI Bank closed at Rs 900.95, up 3.9 per cent, after touching a one-month high of Rs 908.80.

ICICI ballot through
The ICICI Bank EGM at Vadodara, however, was a sedate affair.

“OUR EGM to consider the merger concluded peacefully. Over 500 people attended the EGM and according to regulations, a poll has been conducted successfully,” Managing Director Chanda Kochhar said on the sidelines of the meeting.

Held amid tight security following rumours of likely protests against the merger, the EGM saw shareholders casting their votes for or against the merger of BoR with ICICI. The results, officials said, would be announced tomorrow.

Asked about the duration of the merger process, Kochhar told Business Standard, “It is tough to say how long (the process will take). After the merger approval (within the bank), we need the RBI (Reserve Bank of India) approval.”

The merger is believed to see the shutting of BoR branches, as well as layoffs, one reason for the protests. Kochhar refused to comment when asked how many employees were likely to lose their jobs.

Under the terms, BoR shareholders are to get a share of ICICI Bank for every 4.72 shares. The merger will help India’s second largest lender increase its presence in northern and western states and grow the number of its branches by about a fourth. It will add BoR’s assets of Rs 1,720 crore and 463 branches to ICICI Bank’s of Rs 36,340 crore and 2,009 branches, the latter said last month.

BoR has 111 automatic teller machines, had Rs 7,781 crore of outstanding loans and held deposits of Rs 15,187 crore as of March 31.