Private sector lender, Lakshmi Vilas Bank (LVB) on September 27 said its liquidity position continues to remain strong and it has a fully functional board despite the rejection of seven directors by shareholders at the recent annual general meeting (AGM).
“Certain news items have appeared, expressing concerns about governance of the bank. Based on voting results of the 93rd Annual General Meeting reappointment of seven directors were not approved. However, the bank continues to have a fully functional Board of Directors including three independent directors,” LVB said in a release.
The bank's liquidity position as on date is comfortable, with liquidity coverage ratio (LCR) of around 262 percent against a minimum 100 percent required by the Reserve Bank of India (RBI), the lender said, adding, the management continues to enforce direct and indirect cost reduction measures.
Provision coverage ratio (PCR) remains healthy at 72.6 percent as against the minimum 70 percent prescribed under RBI's Prompt Corrective Action (PCA) framework.
Besides existing business, the bank will continue its focus on capital-light loans. All existing employees will continue to be in full service and remain ever committed as usual to serve customers, the bank said.
Shareholders of LVB have rejected proposals to appoint seven directors to the board, including the Managing Director and CEO S Sundar, the lender said in an exchange communication to exchanges on September 26.
They also voted against the re-appointment of statutory auditors (P Chandrasekar LLP, Chartered Accountants) and branch auditors. Branch auditor is appointed in consultation with the statutory auditor.
These resolutions were taken up at the AGM on September 25, which was held through videoconferencing. Other directors whose appointments were not cleared by shareholders are N Saiprasad, Gorinka Jaganmohan Rao, Raghuraj Gujja, KR Pradeep, BK Manjunath and YN Lakshminarayana Murthy.
Since the appointment of statutory auditor is opposed, the appointment of the branch auditor is also opposed.
Moneycontrol first reported this story on September 26 that section of shareholders have voted against the appointments of seven directors and auditors.
Shareholders also approved increase in the authorised share capital to Rs. 1,000 crore, subject to RBI approval, via a follow-on public offer (FPO), rights issue, qualified (QIP) or other available routes to raise capital.
The management said it will continue the process of considering and evaluating the proposed amalgamation of the Clix Group, and the mutual due-diligence has been substantially completed.