By Higio Zarngam
THE JAIPUR Stock Exchange has suspended trading in shares of the Bank of Rajasthan (BoR), now merged with the ICICI Bank. The exchange is irked by the bank’s 22 June announcement that a board meeting chaired by Dinesh V Lakhani had taken place the previous day; and that it would be sending the relevant applications, along with supporting documents, to the Reserve Bank of India (RBI) for approval of the merger.
Actually, the extraordinary general meeting (EGM) had been cancelled at the last minute after an advocate filed a case in a Kolkata court.
“If the EGM was cancelled, and there was no resolution authorising the board to submit the applications to RBI, how in that case could the bank proceed further in the merger process and submit an application to RBI?” asks Jaipur Stock Exchange chairman Puneet Jain. The suspension order reads: “The information and announcements made to the Jaipur Stock Exchange by the Bank of Rajasthan, in compliance with the listing agreement, were misleading in regard to the amalgamation/merger scheme.”
Before the suspension order was passed, the bourse issued a show-cause notice to BoR, saying: “The bank hid vital information in regard to clearance of applications by the board of the bank for the merger process.” Says Jain: “Though BoR was asked to attend a hearing on 18 August to defend itself, only representatives from ICICI attended.” The ICICI Bank, however, claims that the suspension order signifies nothing. “There is no implication of suspension of trading of BoR shares,” ICICI spokesperson Charudutta Deshpande said in an email.