Mumbai HC admits writ petition for compensation to LVB shareholders

Shareholders of LVB have filed a writ petition in the Bombay HC for a stay of the notification issued by the Central government for amalgamating the LVB with DBS Bank India Ltd.

Chennai: Shareholders of the 94-year-old Lakshmi Vilas Bank (LVB) have started knocking the doors of justice for a fair valuation of their bank, the amalgamation of which takes effect from Friday onwards.

On Thursday, Indiabulls Housing Finance Ltd, Kare Electronics and Development Pvt Ltd and others filed a writ petition in the Bombay High Court praying for a stay of the notification issued by the Central government for amalgamating the LVB with DBS Bank India Ltd, a subsidiary of DBS Bank, Singapore.

The petitioners will also make DBS Bank as a party to the case by amending their petition.

"The petitioners had prayed for a stay of the Central Government notified scheme of amalgamation of LVB with DBS Bank India. The other prayer is to quash the writing off of the entire amount of the paid-up share capital and reserves and surplus, including the balances in the shares or securities premium account of the transfer or bank and the delisting of the shares and debentures," Paras Parekh, Partner, Parinam Law Associates representing Indiabulls Housing, told IANS from Mumbai.

The Bombay High Court, admitting the writ petition, refused to stay the Central government's notification amalgamating LVB with DBS Bank India, and fixed the next hearing for December 14.

The court said: "We are of the opinion, prima facie, that the petitioner's claims being a monetary claim, can be considered at the time of disposal of the petitions."

"The writ petition has been admitted and the other parties - Reserve Bank of India, Central Government, DBS Bank India will have to file their counters," K.R. Pradeep, promoter of the LVB, told IANS.

With amalgamation of the LVB with DBS Bank India taking into effect from November 27 onwards, the entire balance sheet of the latter will be available for the shareholders of the former for working out the valuation and compensation.

As per the Central government scheme, the shareholders of the LVB including about 97,000 individual shareholders will not get anything out of the deal.

It is said, shareholders of LVB will also be filing cases against the LVB-DBS Bank India amalgamation scheme and claiming proper valuation of the former.

(IANS Report)