CLB nod for Sangli Bank EGM on merger

The Company Law Board has given its go-ahead to Maharashtra-based Sangli Bank for the extraordinary general body meeting (EGM) on January 15, in which shareholders of the ailing lender would discuss the merger with ICICI Bank.

Passing an interim order, CLB Chairman S Balasubramanian appointed a Pune-based company secretary Mahesh Athawale as an observer for the EGM. However, he also said the outcome of the EOGM would be subject to his order.

"The EGM convened on January 15 be held as scheduled but decision taken there will not be implemented without the leave of this court," Balasubramanian said in the interim order.

Although some of Sangli Bank's employees have protested against the transaction, its shareholders would consider a resolution for its proposed merger with ICICI Bank. The Board of ICICI Bank has already approved the proposal.

The observer would attend the meeting and submit his report to CLB within 10 days of the meeting.During the proceeding held on January 9, the minority shareholders demanded that the EGM should be adjourned till the share structure of the bank was resolved.

On this, the Board asked for a separate voting for the approval of shares issued by the bank after April 2006.However, the bank contested that calling off the EGM was difficult as notices had been served to all parties to discuss and pass the resolution in favour of the merger.

On December 22, accepting a petition by Kolkata-based Opulent Venture Capital Trust, Sangli's minority shareholder, the CLB had issued notices to bank and its Board of Directors.

CLB had earlier directed Sangli bank and its Board of Directors to file their replies before January 6, which was not submitted.On this, the bank contended that the notice and a copy of the petition was send to them only on December 28 and so they were unable to reply in such a short time.

Denying it, the petitioner said it had sent the notices to them as per CLB's direction.Opulent Venture, which has 12.5 per cent of the paid up share capital of the bank, had accused directors of the bank of mismanagement and fraud and had prayed CLB to stop the bank's proposed amalgamation.