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The extraordinary general meeting (EGM) of ING Vysya Bank, convened to seek shareholders' approval for the amalgamation of the bank with Kotak Mahindra Bank, was a stormy affair with a majority of the 30 speakers that included employee shareholders opposing the deal fearing of job losses.
The bank had announced its merger with Kotak Mahindra Bank on November 20, 2014.
The EGM was attended by 750 shareholders in person and another over 8,500 shareholders in proxy made their presence. All these shareholders represented 169 million shares, announced M Damodaran, former Sebi chairman and independent director of ING Vysya Bank, who chaired the EGM.
Some of the main concerns expressed by a majority of shareholders were pertaining to merger ratio of 725 equity shares for every 1,000 equity shares held in ING Vysya Bank, job security of employees post-merger, salary and retirement benefits, absence of the Vysya brand name in the merged entity among others. Many of them demanded reworking the ratio and make it 1:1 and call the merged bank as "Kotak Vysya Bank" and signing of a tripartite agreement with employees.
The result of the voting at EGM will be announced within 48 hours.
S A Sridhar, general secretary of ING Vysya Bank Officers' Association, termed the merger as a hasty decision and a "distress" sale. He claimed that the ING Vysya Bank management had shown good assets worth Rs 465 crore as NPAs and selling them for just Rs 165 crore and said Kotak Mahindra Bank should have signed a tripartite agreement with employees and management.
Some employee shareholders, however, strongly supported the merger and expressed happiness that shareholders by one stroke made the bank the fourth largest private bank in the country.
"It would have taken us at least 10 years to become the fourth largest bank. But by merging with Kotak, we can achieve this milestone instantly. It is a marriage of two healthy individuals. Like a bride goes to bridegroom's house after a marriage, ING Vysya employees will go into the fold of Kotak. We must make this marriage work as employee shareholders," said A Malathi, an employee shareholder.
Later, responding to shareholders' concerns, Damodaran said, "The valuation of the merger was done by a top international consultant. The management will give highest consideration to the concerns of employees and the security of their jobs."
He said e-voting was not permitted in this case because under the Banking Regulation Act, there was no provision to do so for a merger of banks. As regards to malpractices in both the banks, he said it was for the regulator to look into.
