This is in continuation of the post dated January 9th.
The EGM was held as scheduled on January 30th. Out of nine directors, only four made their appearance. These four included three whole-time directors. It was surprising that nominees of RBI, Government, shareholders and chartered accountants were too busy to attend. Perhaps they preferred to keep away when a controversial, sinister and path-breaking step violative of corporate governance was under discussion.
It was comforting to note that a preponderant majority of shareholders was vocally against the move though the bank packaged it, perhaps misleadingly, as a facilitator for earlier declaration of dividend. These shareholders deserve to be complimented for prioritising strict adherence to law over early payment of dividend. The few shareholders who supported the proposal are, as you would have guessed, former employees of the bank.
There was an audio-visual presentation stressing that the proposal only amounted to right-sizing the Balance Sheet. It is difficult to come across a more blatantly false interpretation of a financial statement. It was sought to be argued that the proposal would make the statements truer and fairer. What a terrible concoction of untruth and deception ! This is nothing but outlandish and unlawful window-dressing.
Why is IOB doing this? The objective is not clear. It cannot be as innocent as wanting to favour the shareholders with a quicker dividend. A bank with such a motive would not have played ducks and drakes with its credit portfolio and created this predicament in the first place.
RBI circular dated February 2, 2017 regarding Basel III Capital Regulations makes it difficult for banks with huge accumulated loss to pay interest on some kinds of bonds issued by the bank. In case a bank defaults on payment of interest, there will be disastrous consequences. It is not known if IOB is in such a crisis. It would be fitting if IOB discloses the real motive for the proposal which of course has been approved with the blessings of GOI and LIC. It is likely that GOI is viewing this as a test case to watch reactions of the public to such ingenious interpretation of corporate governance.
The EGM was held as scheduled on January 30th. Out of nine directors, only four made their appearance. These four included three whole-time directors. It was surprising that nominees of RBI, Government, shareholders and chartered accountants were too busy to attend. Perhaps they preferred to keep away when a controversial, sinister and path-breaking step violative of corporate governance was under discussion.
It was comforting to note that a preponderant majority of shareholders was vocally against the move though the bank packaged it, perhaps misleadingly, as a facilitator for earlier declaration of dividend. These shareholders deserve to be complimented for prioritising strict adherence to law over early payment of dividend. The few shareholders who supported the proposal are, as you would have guessed, former employees of the bank.
There was an audio-visual presentation stressing that the proposal only amounted to right-sizing the Balance Sheet. It is difficult to come across a more blatantly false interpretation of a financial statement. It was sought to be argued that the proposal would make the statements truer and fairer. What a terrible concoction of untruth and deception ! This is nothing but outlandish and unlawful window-dressing.
Why is IOB doing this? The objective is not clear. It cannot be as innocent as wanting to favour the shareholders with a quicker dividend. A bank with such a motive would not have played ducks and drakes with its credit portfolio and created this predicament in the first place.
RBI circular dated February 2, 2017 regarding Basel III Capital Regulations makes it difficult for banks with huge accumulated loss to pay interest on some kinds of bonds issued by the bank. In case a bank defaults on payment of interest, there will be disastrous consequences. It is not known if IOB is in such a crisis. It would be fitting if IOB discloses the real motive for the proposal which of course has been approved with the blessings of GOI and LIC. It is likely that GOI is viewing this as a test case to watch reactions of the public to such ingenious interpretation of corporate governance.
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