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Rediff.com  » Business » BoR, ICICI merger deal gets shareholders' nod

BoR, ICICI merger deal gets shareholders' nod

June 21, 2010 18:43 IST

Amid high drama, Bank of Rajasthan shareholders today voted on a merger deal with ICICI Bank, which got a stay vacated on BoR's extraordinary general meeting.

The meeting to approve the merger of Udaipur-based BoR with the country's largest private sector lender ICICI Bank got off to a chaotic start, when the BoR management said it was cancelling the meet following a stay obtained by an investor from a civil court.

However, the shareholders decided to go ahead with the voting after taking legal opinion, even as BoR announced it was cancelling the meet.

But ICICI Bank went to Calcutta high court and got a stay on the injunction given by the local court.

"BoR EGM has happened. A lower court in Kolkata had issued an injunction against holding of the EGM. The Calcutta high court has now stayed the lower court order," an ICICI Bank spokesperson told PTI from Vadodara.

At the same time, ICICI Bank EGM was held peacefully in Vadodara and transacted the business as per agenda and results (on approval for merger) would be known tomorrow," he said.

Minutes before the BoR EGM was to start in Mumbai, the company secretary announced that its managing director had received a fascimile from an advocate in Kolkata stating that the meeting was stayed by a court there.

The management, after consulting lawyers, cancelled the EGM and the executives left the venue.

Livid at the development, investors, numbering about 1,000, started raising slogans and demanded to see the original court order, which the management said it did not possess, according to a shareholder.

"One of the shareholders has got a court stay against conducting the EGM (which was called to seek shareholders approval for the merger). Now the shareholders are meeting to discuss how to proceed with the agenda," Bank of Rajasthan executive director K K Sharma said.

ICICI Bank last month agreed to take over Bank of Rajasthan in a share-swap deal that valued the Udaipur-based bank at over Rs 3,000 crore (RS 30 billion).

The share swap ratio was fixed at one ICICI Bank share for every 4.72 shares of BoR. Both banks can proceed with the merger only if the shareholders approve the swap ratio.

However, the shareholders cast their votes. One of the shareholders, V N Prasad, said that ballots would be scrutinised by two scrutinisers appointed by the chair, after which it would be submited to the RBI and stock exchanges.

It was not clear whether the Tayal family, which holds controlling stake and has signed a deal with ICICI Bank for sale of its shares, was represented at the EGM.

BoR shares were up 1.54 per cent at Rs 174.50 a share after hitting a 52-week high of Rs 178.80, while ICICI Bank closed at Rs 900.95, up 3.89 per cent, after touching a one-month high of Rs 908.80.

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