LVB slips 6% as shareholders vote against reappointment of top brass

Shares of Lakshmi Vilas Bank (LVB) slipped 6 per cent to Rs 18.10 on the BSE in intraday trade on Monday, after a large section of shareholders of ailing private sector lender voted against the reappointment of the managing director and chief executive, as well as seven directors and auditors at the recent annual general meeting (AGM).
However, the stock recovered from its early morning loss by 09:30 am and was trading 0.52 per cent lower at Rs 19.05 on the BSE. In comparison, the S&P BSE Sensex was 0.76 per cent at 37,671 points.

A section of shareholders of LVB who are unhappy with the way the bank is managed along with its sharp deterioration in finances have voted for the appointment or re-appointment of seven directors (including MD & CEO S Sundar) and auditors during the bank’s AGM held on September 25, 2020. In a bid to raise capital, LVB is in talks to merge with Clix Capital.

On Sunday, September 27, the Reserve Bank of India (RBI) approved a Committee of Directors (CoD), comprising of three independent directors, who would run the day-to-day affairs of the lender.

“With Liquidity Coverage Ratio (LCR) of about 262 per cent as on 27th September 2020, against minimum 100 per cent required by RBI, the deposit-holders, bond-holders, account-holders and creditors are well safeguarded,” LVB said in a press release.

The Bank continues to enforce cost reduction measures both direct and indirect costs. The Bank’s provision coverage ratio remains healthy at 72.6 per cent, against the minimum of 70.0 per cent prescribed under PCA. Further, besides existing business, the Bank will continue its focus on capital-light loans, the bank said in a separate press release.