A plea in the Delhi High Court has challenged the scheme of amalgamation of Lakshmi Vilas Bank with Development Bank of Singapore (DBS), contending that its shareholders have been "left in the lurch" and the Centre and the Reserve Bank have failed to protect their interests.
The petition was listed before a bench of Chief Justice D N Patel and Justice Jyoti Singh on January 13, but was adjourned to February 19 after the bench was told that the Reserve Bank of India (RBI) has moved a plea in the Supreme Court to transfer all pleas against the amalgamation scheme to the Bombay High Court.
The petition in the Delhi High Court has been filed by lawyer Sudhir Kathpalia, who was also a shareholder in Lakshmi Vilas Bank (LVB) and lost his 20,000 shares in the company due to the amalgamation scheme.
Kathpalia has sought quashing of the clause in the scheme which states that from the date of merger, "the entire amount of the paid-up share capital and reserves and surplus, including the balances in the share/securities premium account of the transferor bank, shall stand written off".
The petition has said that under the scheme, DBS was not required to give any shares to the LVB investors in return and they were "left in the lurch".
The amalgamation scheme was approved by the RBI on November 25, 2020 and the merger took place on November 27, 2020.
The petition has contended that the Centre and RBI have failed to protect the interests of the shareholders.
It has also claimed that DBS was chosen for the merger without inviting bids from other banks and financial institutions.
It has alleged that the "scheme of amalgamation was irregular, arbitrary, irrational, unreasonable, illegal and thus, void".
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU