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Tuesday, August 28, 2012

Dhanalaxmi CEO PG Jayakumar under fire for not disclosing RBI rap

PG Jayakumar, the MD and CEO of Dhanlaxmi Bank, has incurred the wrath of some of his board members for failing disclose the Reserve Bank of India's strictures against the bank's promoters, and for defending their alleged breach of regulations with the central bank.

In a letter dated May 14, the RBI had expressed concern that the bank's promoters, including Raja Rao, Shital Raghu Kataria and other companies may be holding more than 5% of the bank but under different names. It asked for comments from the bank so that the issue can be examined.

"Jayakumar was pulled up by the board of directors in a meeting held in early August for not informing them about the communication from Reserve Bank of India. It was the auditors who presented the letter to the board. Despite this he has replied to the letter without informing the board again,'' said a senior bank official in the know of the development.

Mr Jayakumar is also believed to have given a clean chit to the shareholders saying that there is no connection, the person added. The board members are also believed to be unhappy with the auditors who complained of non-transparency and later quit. I am not going to comment on this. It is an administrative matter and matters discussed in the board cannot be discussed in public,'' Mr Jayakumar told ET.

I am very much in the grind and will continue to be in the grind. This (resigning) thought has not crossed my mind,'' Jayakumar said. Shailesh Haribhakti, well-known chartered accountant and board member, declined to comment on the matter. GN Bajpai, former chairman of Securities and Exchange Board of India, and chairman of Dhanlaxmi Bank, did not respond to calls. The bank will hold its annual general meeting on September 28 and appoint new auditors.

The central bank inspectors have also asked the bank for details on the shareholding and ownership pattern. The private sector bank has been under the regulatory glare ever since the exit of a chief executive over board room disputes some time last year.

Source: EconomicTimes


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