New Delhi: The Supreme Court on Wednesday dismissed a petition by a minority shareholder of Bank of Rajasthan Ltd (BoR) against its proposed merger with ICICI Bank Ltd. In a related development, BoR employees threatened to go on a two-day strike protesting the merger.
The court dismissed the petition and called it an “abuse of the process of court” after the lawyer for the petitioner could not disclose the number of shares held by his client in Jaipur-based BoR. The court advised the petitioner, R.P. Somani, to file a fresh case.
Somani had sought the court’s intervention to block the merger on the grounds that BoR promoter P.K. Tayal, his family and his group companies cannot enter a merger agreement when the shares they hold are under judicial scrutiny.
He argued that the Tayals had acquired a stake of around 15% in BoR without complying with a Securities and Exchange Board of India (Sebi) norm that mandates a public announcement.
Sebi in March banned Tayal and around 100 firms and people associated with his family from trading in securities for improper disclosure about their holdings in the bank. According to Sebi, the Tayal family owned 55.01% of the bank in December, even though Tayal claimed his group’s stake was 28.06%.
Somani had in 2009 approached the apex court against the Tayals increasing their stake in BoR. The matter is pending before the court.
On 23 May, ICICI Bank agreed to take over BoR through a share-swap deal that values the troubled lender at around Rs3,000 crore.
Employees of BoR on Wednesday threatened to go on a strike on 4-5 June against the merger process.
“The merger is against the norms,” said S.K. Rathore, organizing secretary of the All India Bank Officers Association. “We have filed a separate petition in the Jaipur bench of the Rajasthan high court opposing the merger, and we expect the case will come up for hearing in the next week.”
ICICI Bank shares gained 0.57% to close at Rs843.10 on the Bombay Stock Exchange (BSE); BoR shares fell 0.09% to Rs163.05. The Sensex rose 1.02% to 16,741.84 points.