The acquisition of the erstwhile Global Trust Bank (GTB) has adversely affected the operations and financial condition of Oriental Bank of Commerce (OBC) even as the public sector bank warned that "it may be further affected in the future.""Our operations and financial conditions were affected by the acquisition of GTB, and may be further affected in the future if there are further weaknesses or NPAS and contingent liabilities," OBC said in its red herring prospectus filed with Sebi today.GTB, which was acquired in August last year, suffered from extremely high levels of NPAs, poor corporate governance with lack of transparency, poor risk management systems and severe liquidity constraints, it said.The bank had a negative net worth of Rs 810 crore, a negative capital adequacy ratio and cumulative loss of Rs 1,077 crore. "We expect GTB will adversely our results for fiscal 2005," it added.Post issue, the central government will continue to hold 51.09% stake in OBC and have nine directors, resulting in continuation of controlling stake in the bank, the filing said."This could lead to government giving OBC directives to acquire banks or financial institutions that are in difficulty to serve public interest and not necessarily to maximise profits," it said.OBC is planning to issue 5.8 crore shares of Rs 10 each, constituting 23.15% of post-issue paid-up capital.
