Shares of Dhanlaxmi Bank slid by as much as 24 per cent in afternoon trade on the bourses today after the All-India Bank Officers Confederation (AIBOC) raised several questions about the lender's financial health. Shares of the lender had opened on a strong note in the morning,but surrendered the gains thereafter,tumbling to a 52-week low on the Bombay Stock Exchange and the National Stock Exchange. On the BSE,shares of the company tanked by 24.23 per cent to a low of Rs 54.25,while on the NSE,they dropped by 24.05 per cent to a low of Rs 54.30. The AIBOC has raised issues relating to the financial health of the bank,besides operational irregularities. We have requested the RBI to conduct investigations relating to various aspects of the bank so that the interest of shareholders and depositors is protected," AIBOC General Secretary G D Nadaf said. He alleged that the bank has been indulging in window dressing of its accounts and not presenting the correct picture to shareholders. At 1341 hours,the company was trading at Rs 60 on the BSE,down 16.20 per cent,and at Rs 61.25 on the NSE,down 14.34 per cent. Dhanlaxmi says union nos baseless;bank is safe,scrip recovers Kerala-based private lender Dhanlaxmi Bank today denied unions' allegations of financial irregularities and termed their numbers as "totally baseless and show their desperate bid to survive." "The allegations are baseless and we do not know from where they have pulled out these numbers. None of these numbers match with our internal numbers," Bank's Chief Financial Officer Bipin Kabra said. Disputing the union charges of the bank having issued certificate of deposits (CD) worth Rs 2,500-cr,Kabra said "our CD number is not even half of that. It is only Rs 1,200 crore. Similar is the case with their allegation of interbank deposits of Rs 1,500-cr,while this is just Rs 1,100-cr." Stating that the numbers are doctored,he said,"the union is propping up numbers from October,while we have not yet audited our Q2 numbers." Attributing real reason behind the issue as a fight for survival,Kabra said their numbers are fast dwindling and today the unionised employees constitute only 10 per cent of the 4,600 workforce of the bank. "No new employees want to join the union,so they are worried about their survival." Kabra also denied the charge that bank has an unaccounted for provision of Rs 100 crore,saying if my quarterly expenses are only Rs 105 crore and if net NPA has been consistently improving,how can I have such numbers ? Earlier in the day the shares of the mid-size lender tanked as much as 24 percent on after it was reported that the industry union All-India Bank Officers Confederation had alerted the Reserve Bank about manipulations in the books of the bank,including unaccounted provisioning,poor capital adequacy ratio and asset-liability mismatch. The report also claimed that RBI had asked Dhanlaxmi to provide over Rs 100 crore towards the unaccounted expenses and provisions by debiting the networth of the bank. This led to a bloodbath on the bank counter as the report pulled down the bank stocks by over 24 percent to Rs 54.25 on the BSE- the biggest one-day fall at since May 2009. However,the Dhanlaxmi counter recovered towards the close of trading and ended at Rs 64.45,still 10 per cent down. The bank clocked a volume of 12,603,658 shares. The matter came to light after finance portal Moneylife.com reported that the aforementioned union had altered the RBI about the irregularities and sought a probe. "We have requested the RBI to conduct investigations relating to various aspects of the bank so that the interest of shareholders and depositors is protected," AIBOC General Secretary GD Nadaf said. Meanwhile,the union members staged a sit-in in front of the RBI office in Thiruvananthapuram. "We would like to unequivocally reiterate that all the allegations are baseless and represent a motivated attempt by one of the unions de-recognised by the bank. There are multiple examples of such falsification of accounts by the association. The RBI only last week granted our MD & CEO Amitabh Chaturvedi,a second term of three years,which is an affirmation of the fact that the audits and inspection into the bank's books have found nothing amiss," the bank said in a statement this evening. The statement further said,in the past three years,the bank has witnessed excellent growth and healthy financials with deposits growing from Rs 3,608 crore in FY08 to Rs 12,530 crore in FY11,a growth of 247 per cent and loans from Rs 2,102 crore to Rs 9,065 crore,a growth of over 330 per cent. Kabra said the union,one of the four representing the bank's employees,is increasingly getting marginalised. He said the bank has a healthy provision coverage ratio,with delinquencies falling every quarter and that there is no cause for concern to investors. In Q1,net profit fell to Rs 3.4 crore Rs 6 crore in the year ago period,even though net NPA ratio improved to 0.23 per cent from 0.76 per cent a year ago.
