All eyes on Dhanlaxmi Bank Board meeting this week; 3 new appointments, including Ravi Pillai, likely

Dhanlaxmi Bank | Chartered Finance & Leasi NG Limited acquired 16,45,000 shares in company at Rs 12 per share on the NSE.

Kerala-based Dhanlaxmi Bank will likely induct three new members on the Board soon, including the NRI-businessman and existing major shareholder Ravi Pillai. The other two new entrants are Kerala-based chartered accountants seen closer to Pillai, according to two people familiar with the development. Both declined to be named.

"There are three new appointments likely on the Board including Ravi Pillai and two others. But one needs to wait for the Board meeting outcome for final clarity," said one of the persons quoted above. Moneycontrol couldn't immediately ascertain the names of the two other individuals.

Pillai, who holds a 10 percent stake in the Kerala-based Dhanlaxmi Bank, may be planning to return to the private lender’s board as a non-executive director (NED), Moneycontrol reported on 20 July.  Pillai is one of the two major shareholder who has close to a 10 percent stake each in the Thrissur-headquartered bank. The other is CK Gopinathan, a prominent investor. Gopinathan and his two family members together hold less than 10 percent in the bank.

Pillai was on the board of Dhanlaxmi Bank till May 2020 but had to exit the board on turning 70, which was the RBI-set upper age limit for directors. On April 26, the RBI issued a notification that raised the age limit for non-executive directors, including the chair of the board, to 75. Other shareholders of the Dhanlaxmi Bank include MA Yussuffali (5 percent stake) and Kapil Wadhawan who owns a five percent stake in the bank. P Raja Mohan Rao (2.44  percent), Shital Raghu Kataria (2.63  percent) and Vespera Fund (4.43  percent) are among other investors.

Pillai is the chairman of RP Group that runs 12 companies. According to the company website, the group has executed projects worth over $ 20 billion in the last 10 years. The group's activities include construction and infrastructure, real estate development, hotels and hospitality, healthcare and wellness, education, information technology, trading and retail, the website says.

The other board members include G Subramonia Iyer (part-time chairman), Gopinathan, G Jagan Mohan (RBI additional director), Suseela Menon R (independent director), G Rajagopalan Nair (independent director), PK Vijayakumar (independent director) and DK Kashyap (RBI additional director).

In the recent past, the Dhanlaxmi Bank had witnessed a series of changes at the top, including the appointment of JK Sivan as the new managing director and CEO in the place of Sunil Gurbaxani, who was ousted by the shareholders in September 2020. At the September 30 AGM, shareholders had ousted Gurbaxani, the RBI-appointed MD & CEO with over 90 percent votes polled turning against his appointment.

Earlier in an exclusive interview to Moneycontrol, Gurbaxani had sought a probe into the events that led to his exit, saying that neither the shareholders nor the board had given him any hints of any performance issues during his six-month tenure.  The decision of shareholders came as a surprise to him, Gurbaxani said, alleging serious corporate governance issues in the bank. His ouster from the bank is unethical and the plan was carried out by a small group of shareholders, said Gurbaxani.

Dhanlaxmi Bank recorded a net profit of Rs 5.28 crore in Q4 of FY21 against Rs 2.60 crore in the corresponding quarter of the previous fiscal. The net profit for the financial year ended March 31, 2021 was Rs 37.19 crore. Total business stood at Rs18,834 crore as on March 31, 2021 from Rs 17,703 crore in the previous year, registering a growth of 6.39 percent.

Shivan, who has over three and half decades of experience in banking, has handled various areas in commercial banking at SBI. He has headed corporate banking, international banking as well as forex operations and was also involved in retail advances and agriculture credit in SBI. Shivan retired as the chief general manager of the stressed assets resolution group of SBI. He was retail branch head for six years in Kerala in rural and urban centres of SBI.