Exclusive | Dhanlaxmi Bank gets three new directors on Board including a woman director

Dhanlaxmi Bank

Kerala-based Dhanlaxmi Bank has appointed three new directors to the Board as the lender strives to come out of the ongoing crisis. The three new directors are Nirmala Padmanabhan, K N Madhusoodhanan and Sreesankar Radhakrishnan, according to a top official in the bank who declined to be named.

With this, the total strength of the bank's board, including the two RBI-appointed directors, is eight. Other directors who remain include C K Gopinathan, who is also a major investor in the bank with a 10 percent stake, and an independent director, G Rajagopalan Nair.

Apart from these two, DK Kashyap and Jayakumar Yarasi are RBI-appointed nominees. Including the bank's CEO, J K Shivan, now the board has eight members. The bank is likely to inform the stock exchanges about the fresh appointments soon.

Earlier, the bank had informed the exchanges that a section of shareholders of Dhanlaxmi Bank had cancelled their request for an extraordinary general meeting (EGM) of the bank that was scheduled on November 12.

“Please note that proposed Extra Ordinary General Meeting of the Bank scheduled to be held on November 12, 2022, is being cancelled, as requisitionists holding more than 10 percent of the equity shares of the bank have agreed to withdraw the special notice dated September 26, 2022,” the bank said in an exchange filing.

On October 20, a section of shareholders of Dhanlaxmi Bank, led by known businessman B Ravindran Pillai, had called an EGM of the bank on November 12, seeking to suspend chief executive officer's power on capital expenditure among other issues.

Nine shareholders, who together have about 13 percent stake in the bank had called the EGM, according to an exchange filing on October 20 evening. Apart from Ravindran Pillai, other shareholders are B Govindan, Hareendran CK, Rajesh K, Vincent CD, Vipin AS, Sreedevi K, George Kollannur and B Sasidharan.

The lender has been facing issues at the top management for a while on account of a power struggle between a section of shareholders and management.

In the quarter ended June 2022, Dhanlaxmi Bank reported a net loss of Rs 26.4 crore on account of higher expenses and increased provisions. Provisions refer to the money set aside by banks against risky loans.

Revenue in April-June quarter was down to Rs 237 crore from Rs 246 crore in the year-ago period.  Interest income rose to Rs 258 crore from Rs 218 crore.

Dhanlaxmi Bank’s board and top management have witnessed a series of exits in the past. Most such resignations were due to differences between the board members.

Former CEO Gurbaxani, in an interview with Moneycontrol,  had alleged that a section of shareholders conspired to oust him.

“The bank needs deep surgery and this bandage approach will not work. Secondly, the professional approach used by me was never accepted by these shareholders. Hence the conspiracy,” Gurbaxani had said.

In December, G Subramonia Iyer, part-time chairman of the bank, resigned citing personal reasons. Iyer had retired as executive director at Uco Bank and was one of the three members of a committee of directors appointed by the RBI in October 2020 to run the bank after shareholders voted out Gurbaxani as CEO.