Uti Bank Board Set To Give Nayak The Clean Chit

The UTI Bank board is set to back the bank's chairman and managing director P J Nayak to the hilt and ask him to cut short his leave and join immediately. The board is meeting on July 31.

Nayak had proceeded on a four-week leave in the wake of the Joint Parliamentary Committee's (JPC) indictment of him. The draft JPC report was extremely critical of Nayak's role in the failed merger of UTI Bank and Global Trust Bank and said he "stood to gain personally from the merger and should have got a due diligence of the merger proposal conducted".

While proceeding on leave, Nayak requested the board to conduct an inquiry into "any culpability which may attach to me" and to decide "whether it would be desirable to have a change in the bank's chairman and managing director".

SBI Caps had initially done the due diligence for the UTI Bank- GTB merger where the share swap deal was fixed a 2.25 :1. However after reports had come out, UTI Bank had appointed Deloitte Haskins & Sells to conduct a due diligence which confirmed the swap ratio.

The bank's executive director S Chatterji is managing the day to day affairs of the bank.

The bank was in advanced talks with JP Morgan to make a preferential issue which was scheduled to have been completed in the next few weeks. The bank is planning to make a 12 to 15 per cent preferential issue to raise around Rs 200 crore of capital.

UTI Bank had earlier in February decided to allot zero coupon fully convertible debentures of around Rs 60 crore or 5 per cent of the equity with AIG Sectoral Fund. This had however hit a roadblock with AIG deciding not to invest in the bank.