City Co-op Bank shareholders seek removal of administrator

Shareholders of the Surat-based City Co-operative Bank have demanded the removal of the bank's administrator R R Waghasia for working against the interests of the organisation.

Around 100 shareholders, under the aegis of The City Co-operative Bank Share Holders Association, staged dharnas outside the bank on Wednesday, while around 70 shareholders were on protest on Thursday.

Dharmesh Patel, a shareholder, said, "Waghasia was appointed the administrator of the bank on August 11. In around one week he has given ample evidence that he is least concerned about the bank's interests."

"He sold government securities worth Rs 14.38 crore with the bank for Rs 12 crore, causing a loss of Rs 2.38 crore. There was no need to sell these securities at one go and Waghasia could have waited for some more time before incurring the loss," Patel said.

"Advocate Tushar Mehta, who had successfully represented the bank in various hearings in the Gujarat High Court, was removed by Waghasia. He has not appointed any advocate yet and there is no one to fight the legal battles on our behalf," Patel said.

"Waghasia seems to be least interested in the bank's functioning. He was not present in the office on Wednesday and has not arrived even today. He says he is burdened with the work of other banks. If he cannot spare time, a new administrator should be appointed," Patel said.

Shareholders are also accusing Waghasia of shielding the bank's defaulters.

"Waghasia is fully empowered to take all necessary steps in the bank's interest. He can initiate legal proceedings against the defaulters to recover the bank's money. Instead, he seems to be working to protect the defaulters," said Sanjay Patel, a shareholder.

"The Ankleshwar-based Pragati Alcochem owes Rs 10 crore to the City Co-operative Bank. As per a court settlement, the company had agreed to repay Rs 17.50 lakh to the bank each month, but the company has failed to fulfil the condition. Under these circumstances, the bank is authorised to take possession of the company and sell it to recover it's dues. The company is valued at Rs 18 crore and the whole case can be settled easily, but Waghasia is intentionally delaying the same," Sanjay Patel said.

"We are agitating for the last two days to press for the appointment of a new advocate to represent the bank in the high court and to take appropriate steps to recover the bank's money from Pragati Alcochem and other defaulters at the earliest. We will continue the dharnas till our demands are met," Sanjay Patel added.

Waghasia was appointed the administrator of City Co-operative Bank by the Gujarat High Court on August 11.

This was following a public interest litigation by the depositors of Suryapur Co-operative Bank, seeking an inquiry into the alleged hawala transaction of Rs 12 crore between Suryapur Bank and City Bank.

The high court has directed Waghasia to complete the inquiry and submit a report within 15 days.