Dhanlaxmi Bank’s investors oust CEO1 min read . Updated: 01 Oct 2020, 05:55 AM IST
Only 9.5% votes polled at the bank’s annual general meeting on Wednesday were in favour of Gurbaxani’s appointment. However, investors approved the appointment of all other directors overwhelmingly
Shareholders of Dhanlaxmi Bank on Wednesday rejected the appointment of Sunil Gurbaxani as managing director (MD) and chief executive officer (CEO), the private sector lender said in a stock exchange filing.
Gurbaxani was appointed MD and CEO of Dhanlaxmi Bank for three years with effect from 27 February and has more than three decades of banking experience with State Bank of Bikaner and Jaipur and Axis Bank.
Only 9.5% votes polled at the bank’s annual general meeting on Wednesday were in favour of Gurbaxani’s appointment. However, investors approved the appointment of all other directors overwhelmingly.
The latest shareholder activism comes a few days after Lakshmi Vilas Bank’s investors voted against the appointment of seven directors, including that of S. Sundar as MD and CEO.
But unlike Lakshmi Vilas Bank, Dhanlaxmi Bank is profitable. It posted a net profit of ₹6.09 crore in the June quarter of FY21, down from ₹19.84 crore a year ago. Gross bad-loan ratio stood at 6.89%, while net non-performing asset (NPA) ratio was at 2.18% as on 30 June. The bank’s capital adequacy ratio was also above the regulatory requirement at 13.94%.
On 28 September, the Reserve Bank of India (RBI) appointed D.K. Kashyap, a general manager in the central bank’s Bengaluru office, as an additional director on the board of the bank for two years. This follows several exits at the bank in the past few months. Sanjeev Krishnan, part-time chairman and independent director, resigned in June, with eight months of his term remaining.
The bank said Krishnan resigned citing personal reasons. He was appointed on the board in February 2018. Krishnan had said in an interview that RBI had appointed him to effect a turnaround and he has resigned after the bank made a profit of ₹65.78 crore in FY20.
Other directors such as K.N Murali and G. Venkatanarayanan also resigned from the board in June. The bank later appointed G. Subramonia Iyer, Dr. (Capt.) Suseela Menon, G. Rajagopalan Nair and P. K Vijayakumar—all of these appointments have been ratified by the shareholders.