Treat 2 Boi Directors As Risk Factors: Sebi

The Securities and Exchange Board of India (Sebi) has directed that Bank of India (BoI) treat two of its directors as internal risk factors. The two directors are T P Karunanandan and Rashpal Malhotra, executive director (ED) and director respectively at the bank.

BoI, which is launching its Initial Public Offering (IPO) on February 21, 1997, is charging a premium of Rs 35. The final prospectus has said under the internal risk factor number 9,, that the bank is informed that the Central Bureau of Investigation is investigating into charges against TP Karunanan-dan, ED of the bank, relating to his earlier assignment in Indian Bank.

Indian Bank ran up losses to the tune of Rs 1,300 crore and both M Gopalkrishnan, ex-CMD of Indian Bank, and Karunanan-dan were arrested following probes launched by the CBI. Both of them are now out on bail.

The other director Rashpal Malhotra has civil suit filed against him, which pending in the court of district judge, Camp Office at Nalagarh in the Solan district of Himachal Pradesh wherein, Punjab National Bank, Nalagarh branch, has impleaded Malhotra in his capacity as attorney to Upkar Industries against whom suit has been filed for recovery of Rs 2,76,970.

Earlier, the BoI had made a mention of these two directors in the disclosure norms. Business Standard had earlier reported that Karunanandan has been listed as a risk factor.

In another move, Sebi has also directed the bank to treat the case relating to a dispute with Fairg-rowth Financial Services and BoI Fin as risk factors.