Shareholders vote out Dhanlaxmi Bank CEO – Times of India

MUMBAI: Shareholders of Thrissur-based Dhanlaxmi Bank have voted out the Reserve Bank of India (RBI)-approved MD & CEO Sunil Gurbaxani at its annual general meeting on Wednesday. A filing by the bank said that 90.5% of the shareholders voted against the appointment.
The shareholders’ action will pose a fresh dilemma for the central bank, which is still dealing with a leadership crisis at Lakshmi Vilas Bank where the RBI-approved CEO S Sundar was voted out last week.
In the meeting, Dhanlaxmi Bank shareholders approved the appointment of C K Gopinathan, G Subramonia Iyer, Suseela Menon, G Rajagopalan Nair, and P K Vijayakumar as directors. They also cleared the appointment of an auditor and an increase in the authorised capital of the bank. However, only 9.5% of shareholders voted in favour of the CEO.
The shareholders — who have a widely distributed holding, include foreign portfolio investors (11%), individuals and trusts — had clashed with the management over plans to diversify. Dhanlaxmi Bank also has a strong union presence, which has opposed the management plans to ‘modernise’ and to open more branches in the northern states. On Tuesday, the bank had informed the stock exchanges that the RBI had appointed its general manager at Bengaluru D K Kashyap as an additional director.
The largest individual shareholders are B Ravindran Pillai, a Middle East-based billionaire who heads the RP Group and has a 10% stake in the bank. Director C K Gopinathan is the second-largest individual shareholder with a 7.5% shareholding. UAE billionaire, Lulu Group MD M A Yusuff Ali, and DHFL Group’s Kapil Wadhawan both hold 5% each.
Dhanlaxmi Bank’s board appointed Gurbaxani as the MD & CEO for three years effective from February 27, 2020 after receiving a clearance from the RBI. Gurbaxani replaced T Latha, who resigned on October 30 last year due to personal reasons.
The 93-year-old bank has a long-standing relationship with a large number of temple trusts in southern India, which has given it a strong deposit base. Nearly 60% of the bank’s branches are in Kerala with a major presence in Tamil Nadu. The bank was earlier under the RBI’s prompt corrective action framework, but was removed in February 2019.