CLB extends stay on Fed Bank appointments

The Company Law Board (CLB) today extended the stay on the appointment of new directors on Federal Bank board as the Kochi-based old private bank has sought time for itself.

The CLB today asked Federal Bank to file its reply by November 5, while both ICICI Bank and Unit Trust of India have been directed to file the counter-reply by November 15.

The stay is to continue till both the sides are heard, said sources. Federal Bank sought more time from the CLB citing that Kerala High Court hearing of the case was coming up on October 19.

After the CLB had stayed the Federal Bank poll on September 29 held at its annual general meeting, the bank had taken the matter to the Kerala High Court.

The high court did not dismiss the CLB order but permitted the bank to hold a board meeting with a rider that no policy decisions should be taken. Federal Bank's board meeting took place on October 11.

ICICI Bank had moved the CLB, seeking the stay order on the directors' appointment. The bank, which holds a 20.44 per cent stake in Federal Bank, was allegedly denied the right to exercise its full voting rights in the eventful AGM on September 27 even though the CLB, Chennai, on September 24 had directed the chairman of the AGM to allow ICICI

Bank to exercise its full voting rights. Other stakeholders like HDFC, UTI and Kotak Mahindra were also denied their full voting rights. UTI too filed a petition at the CLB in this regard.

ICICI Bank moved the application ex-parte as it was allegedly allowed to use its voting rights to the extent of 2,670,000 shares even though it holds 4,532,400 shares in Federal Bank.

Federal Bank had been given time till October 7 to respond to this and ICICI Bank till October 15 for its rejoinder to Federal Bank's response.