Thai Group Allowed 40% In Csb

The cabinet committee on foreign investment (CCFI) yesterday cleared the proposal of the Siam Vidya Group (SVG), Thailand, to acquire up to 40 per cent equity in the Thrissur-based Catholic Syrian Bank. It has been stipulated that the group should bring in Rs 100 crore of capital.

This ends two and a half years of drama on the issue, which had been hanging fire due to controversy regarding the nationality of Surichan Shansri Chawla, the Bangkok-based non-resident Indian, who heads SVG.

The proposal is for Chawla and his seven collaborators to invest $3 million each in the bank, the third largest private bank in the country with an equity base of Rs 54.14 crore. It has 3,000 employees in 231 branches.

 

Chawla had earlier purchased 19.59 lakh shares of the bank at the rate of Rs 85. The face value of the shares is Rs 10 each.

The proposal had come under the spotlight in March 1994, when the Bishop of Thrissur, Joseph Kundukulam, had opposed it on the ground that Chawla was a non-Malayali and would not preserve the regional character of the bank. The Bishop wanted the management of the bank to remain with the Syrian Catholic community.

The Bishop controls the banks deposits, amounting to Rs 242 crore, mainly of Christian institutions.

The application for equity acquisition in the bank was submitted to the Foreign Investment Promotion Board in 1993. The finance ministry approved it in July last year. The proposal technically did not require the CCFIs approval, as it was for an investment under Rs 600 crore, but the ministry decided to refer it to the committee in view of its sensitive nature.

In September last year, decks were cleared for the formal transfer of shares to SVG, after queries raised about Chawlas nationality by the Prime Ministers Office were set at rest by documents.

However a fresh controversy broke out in Thrissur as the CSB Shareholders Association, which had been opposing Chawlas entry, alleged that the Bangkok-based businessman was trying to sell his shares in the bank to another NRI as he had failed to get clearance from FIPB or PMO.

This NRI was said to be willing to buy the shares from Chawla at Rs 250 a share, provided Chartered Securities would also transfer their shares in CSB to him. Significantly, the CSB board has never been opposed to the transfer of shares to Chawla. But with the Bishop coming out in the open against the transfer, K Karunakaran, Kerala Chief Minister at the time, also lobbied at the Centre against the share transfer.