Page 7 - BF Cover February 2019

BANK UPDATE

PNB board finds no criminal evidence against sacked EDs
CBI files FIRs against
The PNB bank's board found no criminal intent, and a "casual oversight" on the Chanda, Deepak Kochhar
part of sacked Executive Directors. and Dhoot
On January 18, the finance ministry issued an or- The CBI has registered an FIR
der to sack Rao and Sharan, who were about to against sev-
complete their tenure as executive director at PNB. eral entities
The action came six months after the ministry is- and persons,
sued a show-cause notice to both the executives, including
along with former PNB MD & CEO Usha former ICICI
Ananthasubramanian, seeking their views on the possible lapses. The ministry Bank MD and
had earlier sacked Ananthasubramanian on her last day as chief executive at CEO Chanda
Allahabad Bank in August last year. Kochhar, her husband Deepak
Kochhar and Videocon Group MD
The finance ministry's Department of Financial Services (DFS) had sought a re-
Venugopal Dhoot, for alleged irregu-
sponse from the board of PNB last year, which had convened a meeting in July
larities in loans sanctioned in 2012.
2018, on its show-cause notice. "Apparently, there is no substantial information
provided by DFS which suggests any criminality or criminal intent by the two The FIR also listed Videocon Interna-
executive directors," the minutes of the meeting, held on July 26 last year and tional Electronics Ltd (VIEL),
chaired by MD & CEO Sunil Mehta, showed. Both Rao and Sharan contested Videocon Industries Ltd (VIL),
the government's approval given to the Central Bureau of Investigation (CBI) Deepak Kochhar-owned NuPower
for prosecuting them in a criminal case in the Delhi High Court last year. Renewables Ltd (NRL), and Supreme
Energy, which was originally pro-
Merger of Dena, Vijaya Bank with BoB gets Cabinet moted by Dhoot.
approval
The merger of Vijaya Bank and Dena Bank with Bank of Baroda moved a step The CBI carried out search opera-
ahead with the Union Cabinet approving a scheme tions in the Mumbai and
of amalgamation for the same and the board of Aurangabad offices of the Videocon
the respective banks giving their nod to the share Group, Supreme Energy and NRL.
swap ratio. Noting that various committees of
ICICI Bank had sanctioned loans to
The scheme will come into force on April 1. The
Videocon group companies on differ-
amalgamation will be the first-ever three-way
ent dates, the FIR has named former
consolidation of banks in India, with the amalgam-
and current officials of ICICI Bank
ated entity emerging as the country's second largest public sector bank, a Cabi-
who were a part of these commit-
net statement said. Vijaya Bank and Dena Bank are transferor banks and BoB
tees, including Sandeep Bakhshi,
is the transferee bank.
Zarin Daruwala, K Ramkumar, Sonjoy
The fair equity share exchange (share swap) ratio for the amalgamation is: 402 Chatterjee, NS Kannan, Rajiv
equity shares of Rs.2 each of BoB for every 1,000 equity shares of Rs.10 each of Sabharwal, KV Kamath and Homi
Vijaya Bank; and 110 equity shares of Rs.2 each of BoB for every 1,000 equity Khusrokhan.
shares of Rs.10 each of Dena Bank. Every permanent and regular officer or
employee of the transferor banks will become an officer or employee and will As these loans turned into NPAs and
hold his office or service therein in the transferee bank such that the pay and caused losses to the bank to the tune
allowance offered to the employees/officers of transferor banks will not be less of Rs.1,730 crore, the role of these
favourable as compared to what they would have drawn in the respective trans- officials may also be investigated, it
feror bank, it added. said.

BANKING FINANCE | FEBRUARY | 2019 | 7