Dhanlaxmi Bank director resigns; raises serious governance issues
Independent Director Sridhar Kalyanasundaram has resigned from the board of Dhanlaxmi Bank, alleging unethical conduct and irregularities by the bank’s management and MD and CEO Shivan JK.
Kalyanasundaram alleges that his inputs were deliberately ignored or overruled by other board members to support the MD and CEO. He also alleges that the bank’s management is stifling discussions by other board members.
In a letter to the board of Dhanlaxmi Bank, the independent director, who was appointed in December 2022, said that he had raised concerns about a number of issues.
He says that the bank’s one-time settlement (OTS) scheme is being used even in cases where there are no NPAs. He cites the example of Jalan Hotels of Kolkata, where the OTS was used to release a guarantor at a hugely discounted price.
Kalyanasundaram also alleges that the Dhanlaxmi Bank management has not taken any action on numerous whistle-blower complaints.
He has also pointed out the board’s unilateral arrogation of powers despite legal advice to the contrary. The board’s refusal to refer a shareholder’s allegation that the MD & CEO’s appointment in 2021 was not in order to an adjudicating authority, despite the director’s advice.
The irregularities in the manner that the board and committee meetings were being conducted, such as the MD & CEO and the company secretary deciding on the agenda and the frequency of the meetings without consultation with the other directors.
The director said that his concerns had been “brushed away” by the other members of the board, and that he had “no support” from them. He said that he had “decided to resign rather than fight a lone battle,” and that he did not want to be a part of a group that practiced the belief that “you can wish such behavior away.”
The resignation of the independent director is a serious matter, and raises concerns about the governance and management of Dhanlaxmi Bank. The bank should investigate the allegations raised by the director, and take steps to address any issues that are found.
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