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No interim relief for Kotak Mahindra Bank from Bombay HC

The matter will be heard next on January 17, 2019

Subrata Panda  |  Mumbai 

Kotak buys out Old Mutual's 26% stake for Rs 1,293 cr in insurance arm

The on Monday refused to provide interim relief to Bank in the matter of reducing its promoter holding to below 20 per cent by December 31.

A division Bench headed by Justice B P Dharmadhikari and Justice S V Kotwal directed the (RBI) to file its affidavit by January 17. From the bank's side, senior counsel Darius Khambata requested the Bench to direct the central bank to not take any coercive action against Bank till the pending hearing and final disposal of the writ petition. The had asked the private lender to reduce promoters' stake to 20 per cent of paid-up capital by December 31 and 15 per cent by March 31, 2020.

The court observed that the was a responsible regulator and it would leave it to the central bank's wisdom to further deliberate on whether the mandated norms were met by the bank within the deadline.

Bank had moved the on December 10 after the central bank did not accept the reduction of promoter shareholding through an issue of preference shares. In August, the lender issued perpetual non-convertible preference shares, which it said would trim promoters' shareholding from 30.3 per cent to 19.7 per cent. The bank's counsel argued that in such a short period, the only option would be to bring in a foreign investor.

The bank's shares ended Monday's trading session 2.5 per cent lower at Rs 1,223.90 on the BSE.

Disclosure: Entities controlled by the Kotak family have a significant shareholding in Business Standard

First Published: Mon, December 17 2018. 14:42 IST