The Hindu Business Line : `Centurion-LKB merger not under Cos Act'

A counter-affidavit filed in the Kerala High Court, by Mr B. Swaminathan, Managing Director, Lord Krishna Bank, pointed out that banking companies were controlled, supervised and inspected by RBI experts, which could not be done by inspectors to be appointed by the Central Government under Section 237 of the Companies Act. The Section was applicable only to companies other than banking companies.

The affidavit was filed in response to a writ petition filed by Mr Umesh Kumar Pai, a minority shareholder, challenging the merger of Lord Krishna Bank with the Centurion Bank of Punjab and seeking to appoint inspectors to investigate the amalgamation scheme.

Mr Swaminathan said in the affidavit that no provision of the Companies Act could be invoked to challenge the amalgamation proceedings initiated under Section 44A of the Banking Regulation Act. In fact, Section 44A had overriding effect over Section 237 or any other provisions of the Companies Act.

The resolution approving the scheme of amalgamation was passed by a majority, representing two thirds in value of the shareholders present either in person or by proxy at the meeting as required under Section 44A(1) of the Banking Regulation Act, it said.

The contention that approximately 65 per cent of the shares were held by a single entity was totally false and baseless, it said.

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