CLB stays Federal Bank AGM resolutions

Our Banking Bureau
29 September 2004

Mumbai: The Company Law Board (CLB) has put a stay against all the resolutions that were put to vote at the AGM on Monday. Federal Bank has been given time up to October 7 to file the reply, and up to October 15 to file a rejoinder, if any. The hearing will be held on October 18.

An ICICI Bank spokesperson said that the CLB, Chennai office issued a stay order on Tuesday evening against these resolutions.

The stay order was issued on the grounds that ICICI Bank was not allowed to exercise its full voting rights at the AGM, despite producing a CLB letter permitting it to do so.

The chairman of Federal Bank, K.P. Padmakumar, who presided over the AGM, had "overruled" the CLB letter, the spokesperson said. Of about 44 lakh shares held by ICICI Bank, only 26 lakh shares (11.7 per cent) were allowed for voting.

The chairman held that the erstwhile ICICI had been given permission originally to exercise voting rights only for 26 lakh shares, and not the remaining shares that it had acquired through rights issue.

The chairman had also reportedly asserted that under Reserve Bank of India rules, ICICI Bank was not eligible for the full voting rights. In all, seven resolutions were put to vote. Resolutions seeking appointment of ICICI Bank-supported directors and splitting of the chairman''s post were defeated.