Kotak Mahindra Bank moves HC over stake dilution

■

New Delhi, Dec. 10: Kotak Mahindra Bank Monday said it has moved the Bombay High Court against RBI’s decision with respect to the bank reducing promoter holding using preference shares.

In August, Uday Kotak, the founder and promoter of Kotak Mahindra Bank, has pared down his stake in the bank to 19.70 per cent from about 30 per cent following issuance of preference shares.

Within few days, the RBI said the stake dilution by Kotak does not meet its regulatory norms on the same, something the private sector lender contested. “We continue to believe that we have met the requirement and will engage with RBI in this behalf,” Kotak Mahindra Bank informed the exchanges on Monday citing its regulatory filing made on August 14.

The bank said it has since clarified and conveyed to the RBI “our position in relation to perpetual non- cumulative preference shares ( PNCPS) being a part of paid up capital and the legal basis on the matter of dilution of shareholding under the Banking Regulation Act.”

Further, Kotak Mahindra Bank said it has also shared with RBI the opinions of eminent jurists and senior most legal counsels of the country which confirm its understanding. “However, we have not heard from RBI on the above matter. Given the milestone of December 31, 2018, the bank has been left with no option but to protect its interest.