Charging the Board of Dhanlaxmi Bank Ltd of unethical conduct, unilateral arrogation of power, lack of comprehension of issues, and factionalism, Independent Director Sridhar Kalyanasundram has resigned.

His resignation comes ahead of the bank’s annual general meeting (AGM) which is slated on September 30.

Kalyanasundaram, in his resignation letter dated September 16, charged the Board and the executives of unethical conduct of banking business with regard to the one time settlement (OTS) scheme for loans.

“While the OTS scheme has been put to use to a great deal of success by the banking sector at large – to effectively deal with the NPA positions – it has been seen being used even where it had no impact on the NPA position of the Bank, by its executives,” Kalyanasundaram’s letter notes.

“The classic case in reference is to the recent OTS of the Jalan Hotels of Kolkata, where the OTS was used to release a guarantor – even after the original debtor had been cleared by the consortium of banks and lenders – and where your Bank held a Registered Charge against the property given as guarantee to the original debtor,” he said.

“Despite my advising the Board of the hugely discounted offer (INR 5.25 crore against a reported market value of INR 35 crore), I was voted out 6 to 1, and surprisingly even one of the additional directors appointed by the regulators supported the proposal brought to the Board,” he charged.

“There are many instances where despite the value of the inputs given, my inputs have been deliberately negated/avoided/overruled by the other members of the Board, just to support the belligerent attitude of the MD & CEO – who is on public record (in the vernacular press) that he cares little for shareholders and the directors. I am not the only or even the first director to face his wrath for not towing his line, as many had left rendering this Board legally inconsistent with required composition,” the resignation letter notes.

Kalyanasundaram has also said the powers that be had threatened to dismiss him from the Board for raising 81 queries with regard to the agreement with the Issue Manager for the bank’s proposed Rights Issue.

“I have been recording my DISSENT at every meeting where it was attempted to be cleared either through a bulldozer approach or through an ambush approach (where the EIC – Equity Issuance Committee – proceedings would be attempted to be adopted at the next ensuing Board Meeting without even its (EIC) Minutes of the Meeting being prepared and agreed to),” he said.

“When this did not work, the powers that be had openly threatened me with being ‘sacked from the Board’. The records of the Bank regarding the EIC proceedings from January 2023 till July 2023, when the last of such meetings were held, will stand witness to my stand,” Kalyanasundaram said in his resignation letter.

Reacting to the development in the Kerala-based private bank, All India Bank Employees’ Association (AIBEA) General Secretary C.H.Venkatachalam told IANS: “We demand the Reserve Bank of India (RBI) to probe all the serious allegations instead of just accepting the resignation.”