The state-owned financial institution, Sicom, has registered its protest with the Company Law Board (CLB) over alleged forged proxy voting in the election for the reappointment of directors at United Western Bank's (UWB) annual general meeting held in Satara on Thursday.
Sources close to Sicom allege that at least 15 lakh to 20 lakh proxy shares were fabricated with several bunches of proxy forms having same handwriting.
The top management of United Western Bank had been campaigning quietly against the reappointment of the 2 directors representing Sicom on the bank's board -- AKD Jadhav, managing director of Sicom and Sharad Upasani. Besides, Sicom had proposed a resolution for appointment of 4 new additional directors on the board -- S Jambunathan, Ramesh Venkat, PB Kulkarni and PC Shejwalkar.
However, at the last minute, PB Kulkarni, former chairman and managing director of Bank of Maharashtra and Shejwalkar, Pune-based management educationist, dropped out of the race.
Sicom and UWB have been at loggerheads ever since a memorandum of understanding (MoU) was signed between the 2 for integration of the banking and financial institutional activities of both. Sicom had picked up a total of 9.9 per cent equity in the bank in 2 tranches -- in 1995 and another in 1999 -- at a premium of Rs 30 per share on a face value of Rs 10 per share involving a total investment of close to Rs 12 crore.
When Sicom bought bank's equity for the first time, it was for integrated working, and at the second instance, it was for joint financing. Integration and merger was one of the option between the two.
Sicom had also proposed that Shrikant Gadre of the bank join on its board.
In its joint petition with the Reserve Bank of India (RBI), both Sicom and the bank had proposed merger, and therefore, had sought permission to allow Gadre on Sicom's board.
This request is still pending with RBI. The first MoU was signed between UWB and Sicom in 1998 for joint financing and training of their staff. However, none of the terms of the MoU materialised as the bank's management did not show any interest in implementing it, Sicom officials complain.
Sicom, however realised that the bank had placed 9.9 per cent equity with it to ward off predators trying to takeover the bank.
The 1998 MoU expired in October 2000 when Sicom insisted that 4 of its representatives should be on the bank's board. A compromise was reached for 3 instead.
Meanwhile, PN Joshi, chairman and managing director of UWB, who negotiated the 2 equity deals with Sicom retired sometime in August 2000. After which, the relationship between Sicom and UWB got strained as the Satara-based bank suspected Sicom of aligning with the Mumbai-based Makharias.
Earlier, Makharias had close relationship with the top management of the bank and had even received liberal funding for their group companies to the tune of Rs 48 crore. A large part of the funds borrowed from the bank by Makharias is said to have allegedly been diverted to mop-up equity of UWB. The Makharias group and their associates are said to be currently holding close to 16 per cent of UWB's equity. However, the Makharias have declined to confirm this figure on the ground that the matter is prejudice.
Makharias' holding in the bank and a suspicion that Sicom could be working closely with the Makharias for takeover strained relationship between the bank and Sicom directors.
Meanwhile, the Makharias filed a petition with the CLB for the freezing of 8 per cent equity mopped-up from the market by the Employees Share Trust of UWB. The bank has also filed a petition with the CLB to freeze the 9.9 per cent shares held by Sicom on the ground that the financial institution was conspiring with the Makharias. It has also sought the freezing of the shares held by Makharias fearing a takeover bid.
With several petitions creating controversies and the newest being alleged forged voting, the CLB may not declare the results of the voting for the reappointment and new appointment of directors immediately until the petitions are cleared.
