By Venkatachari Jagannathan Chennai, Sep 28 : The voting out of seven Directors, including a promoter does not mean there is a major split within the promoter group of Lakshmi Vilas Bank (LVB), said K.R.Pradeep one of the promoters. Pradeep also said he would not approach the Reserve Bank of India (RBI) to annul the AGM decisions and request it to call a meeting of the shareholder to elect Directors as provided in the Banking Regulation Act. He was one of the seven Directors of the bank who was voted out by shareholders in the annual general meeting held on September 25, 2020. "There is no major split within the promoter group. The voting out of seven Directors will not have any impact on the bank operations as well as the proposed amalgamation deal with Clix Group as the bank has said in a media statement," Pradeep told IANS. However, the voting pattern, as per the regulatory filing, shows some interesting aspects. In case of the appointment of seven directors, 19 per cent of the votes polled belonging to the promoter/promoter group were against but the remaining 81 per cent in favour. As per regulatory filing, there are 25 shareholders under the category promoter and promoter group. The public institutions (99 per cent votes cast) and public non-institutional shareholders (62 per cent votes cast) voted against the resolutions for appointment of directors and statutory and branch auditors. In the case of appointment of Independent Directors (Shakti Sinha, Satish Kumar Kalra and Meeta Makhan), raising of additional capital, borrowing limits and for amendment of Memorandum of Association for increasing the authorised capital, the votes cast in favour were almost 100 per cent. "The period of three years, when I was not on the board, the bank suffered the maximum damage. Now, the bank's liquidity position is good and there is no need for depositors to worry about their monies with the bank," Pradeep said. "The most important aspect is that the depositor's money is safe. My association with the LVB is for the past 12/13 years. But the bank is 93-years old. Never in its history the bank has defaulted on its deposits," Pradeep added. The LVB on Sunday said its liquidity position as on 27th September 2020 was comfortable, with Liquidity Coverage Ratio (LCR) is about 262 per cent against minimum 100 per cent required by RBI. "Hence, Bank does not have any Asset-Liability mismatch and is successfully fulfilling its commitments to deposit-holders, bond-holders, account-holders and creditors," LVB added. With the shareholders voting out seven Directors including himself a question mark hangs on the fate of the proposed amalgamation deal with Clix Group. The amalgamation has to be ultimately approved by the shareholders. Reacting to that Pradeep said: "The Clix deal is progressing well. We will cooperate for its finalisation. I don't see a challenge for the Clix proposal. The members of the present board had given their nod for Clix proposal earlier. The RBI (Reserve Bank of India) may take extra effort to see the deal concluded expeditiously. The shareholders may not vote against the Clix deal as they did in the appointment of Directors." In its statement LVD said: "The Bank will continue the process of considering and evaluating the proposed amalgamation of M/s. Clix Capital Services Private Limited ("Clix Capital"), M/s. Clix Finance India Private Limited ("Clix Finance"), and M/s. Clix Housing Finance Private Limited ("Clix Housing"), (collectively, the "Clix Group") with the Bank, and as was previously informed on 15th September 2020, the mutual due diligence is substantially complete." For the year ended 31.3.2020 LVB had posted a net loss of about Rs.836 crore. The bank has been incurring losses for the past 10 quarters and the RBI has initiated Prompt and Corrective Action in September 2019 and a steady downward trend in its deposit base. When asked why the shareholders should reelect the same set of Directors given the bank's performance, an unfazed Pradeep said: "95 per cent of the bank's loss is due to provisions." "The bank is in talks with four large asset reconstruction companies. The bank can sell its NPA of about Rs 5,000 crore for about Rs 2,000 crore," Pradeep said. According to Pradeep, LVB has about 560 branches and the overheads alone were about Rs.800 crore per annum. The market capitalisation is just Rs 600 crore. The valuation is ridiculous unlike the new private sector banks. "As per our analysis, if there is a capital infusion about Rs 1,200 crore, then the operating profit in three years will be about Rs 100 crore," Pradeep added. Pradeep rued that LVB always got a bad press by being called as a weak bank even when it has been honouring its commitments to its depositors for the past 93 years. "There has been no bailout for the bank like that of many other new generation banks," Pradeep remarked. /IANS