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Shares of  Lakshmi Vilas Bank have been under pressure since June 2017 (Mint file)
Shares of Lakshmi Vilas Bank have been under pressure since June 2017 (Mint file)

Lakshmi Vilas Bank shares slip 5%, lender says FIR 'desperate'

  • Delhi Police’s Economic Offences Wing registered a complaint against the lender's board alleging cheating and misappropriation
  • So far this year, shares of Lakshmi Vilas Bank have declined 58%, while they have fallen 5.4% in September so far

Shares of Lakshmi Vilas Bank Ltd slipped 5%, hitting lower circuit at 36.55 on Friday. Investors were concerned after the Economic Offences Wing (EOW), Delhi, registered a first information report (FIR) against directors of the bank for alleged cheating, criminal breach of trust, criminal misappropriation and criminal conspiracy.

"The FIR is based on a complaint filed by M/s Religare Finvest Limited (RFL) pertaining to adjustment of their deposits to the dues of M/s RHC Holding Pvt Ltd and M/s Ranchem Pvt Ltd. The same is received at bank's end on 25 September. The bank is considering appropriate legal measures to counter the same," the company said.

Calling it a “desperate measure" the private lender, in a separate statement on Friday, said the mere registration of FIR against the bank does not mean anything at this stage. “The bank is committed to cooperate with the investigating agencies and regulatory authorities apparently in order to bring out the malicious attempts of RFL to mislead the public to cover up massive fraud indulged by their own promoters, employees, group companies."

Lakshmi Vilas Bank also said that during the fiscal 2017-18 it had adjusted deposit loans aggregating to 794 crore, extended to M/s.RHC Holding Private Limited and M/s.Ranchem Private Limited, group companies of M/s Religare Finvest Limited (RFL) against RFL’s deposits . Disputing the said adjustment, RFL has filed a suit against the bank in May, 2018 before the Delhi High Court and the same is being defended appropriately by the bank.

“RFL had also filed an interim application in the suit claiming attachment of the assets of the bank, its employees, directors etc. The said application was heard for more than an year and when the same was reserved for orders, RFL made a submission to the court for withdrawing the said interim application for the reasons best known to them. Till date no adverse orders have been passed against the bank by any judicial forum. The hearing in the case slated for yesterday has been adjourned to 30th October 2019," it said.

So far this year, shares of Lakshmi Vilas Bank have declined 58%, while they have fallen 5.4% in September so far.

In April, the private sector lender had said that its board approved a merger with mortgage financier Indiabulls Housing Finance Ltd in an all stock deal. The merged entity, will be called Indiabulls Lakshmi Vilas Bank and will be among the top eight private banks in India by size and profitability.

As of 31 December, Lakshmi Vilas Bank operated 569 branches and 1,046 ATMs across 19 states and one Union territory. For the fiscal ending 31 March 2019, its loan advances stood at 24,123 crore.

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