LKB merger in doldrums

The merger of Kochi based Lord Krishna Bank (LKB) with the Centurion Bank of Punjab (CboP) is in doldrums, as the case pending with the Kerala High Court is likely to prolong further.

Umesh Pai, a shareholder of LKB and the original petitioner, had challenged the resolutions and proceedings of the bank's annual general meeting before the High Court. Justice M N Krishnan has posted the case for further hearing on 25th May.

Meanwhile, the scheme of amalgamation approved by the boards of both the banks and the AGM will expire by 30th April, 2007. The boards recently extended the scheme for a further period of 3 months effective from 1st May, 2007.

Legal sources have opined that the extension would not be valid unless approved by a fresh AGM. But sources at the bank said that the last AGM had given prior approval to extend the scheme unless it were not to be in effect by the deadline.

Since the merger issue is under judicial scrutiny, RBI has not responded to the Kerala chief minister, V.S Achuthanandan's letter citing serious concerns about the merger of LKB with CboP.