Dhanlaxmi Bank independent director Sridhar Kalyanasundaram resigns from board

Dhanlaxmi Bank Ltd.’s independent director Sridhar Kalyanasundaram has resigned from the board with effect Sept. 16., citing “factionalism” to “unethical” business conduct. Kalyanasundaram, appointed on Dec. 5, 2022, also referred to whistle-blower issues, rights issue of the bank and the “belligerent attitude” of Shivan JK, managing director and chief executive officer, among other reasons for his exit, according to the company’s exchange filing.

Reasons Behind Resignation

In his resignation letter, Kalyanasundaram has raised issues like factionalism in the board, his differences regarding rights issue and the alleged ‘lack of in depth banking knowledge’ in other members. The former independent director also raised the “probity and lack of consensus” on the various whistle-blower issues, as a reason of resignation. He said that despite the board receiving numerous complaints, they have been dismissed.

This comes after Ravindran Pillai, head of RP Group, who holds 9.99 per cent stake in the bank (largest shareholder), came out with a special notice for removal of Kalyanasundaram. A resolution in this regard would be passed at the 96th annual general meeting (AGM) to be held on September 30.
The bank had received complaints from other ‘whistle-blowers’ earlier too but Kalyanasundaram said that all those had been overlooked by the bank terming those as “the habit in this bank over time”.
The director also alleged that the bank has been using a one-time settlement scheme even without any meaningful impact on the bank’s non-performing assets. The NPA ratio was at 5.2% at the end of June.
It will now be interesting to see how RBI will address the alleged lack of governance at the bank.

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