Compensation to Lakshmi Vilas Bank shareholders: Mumbai HC admits court petition | spcilvly

Compensation to shareholders of Lakshmi Vilas Bank: The shareholders of Lakshmi Vilas Bank (LVB), founded 94 years ago, have started knocking on the doors of justice to obtain a fair valuation of their bank, whose merger will take effect from on Friday.

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

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

“The petitioners had prayed for a stay of the Central Government’s notified plan of merger of LVB with DBS Bank India. The other prayer is to quash the cancellation of the entire amount of paid-up share capital and reserves and surpluses, including balances in account of shares or securities premiums of the transferor bank and delisting of the shares and debentures,” Paras Parekh, partner at 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 on the merger of 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 claims of the petitioner, being a monetary claim, can be considered at the time of disposal of the petitions.”

“The petition has been allowed and the other parties (Reserve Bank of India, Central Government and DBS Bank of India) will have to file their replies,” KR Pradeep, promoter of LVB, told IANS.

With LVB’s merger with DBS Bank India coming into effect from November 27, the entire balance sheet of the latter will be available to the shareholders of the former for calculating valuation and compensation.

Under the central government’s plan, LVB shareholders, including some 97,000 individual shareholders, will get nothing from the transaction.

It is said that LVB shareholders will also file cases against the LVB-DBS Bank India merger plan and demand a proper valuation of the former.

The story has been taken from a news agency.

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