Thailand NRI, Mr. Chawla to reduce his holding in Kerala Bank
(violation of the Foreign Exchange Regulation Act) FERA violations
Thailand, March 30, 2010
Thailand-based NRI, businessman Surachan Chawla, who currently holds 24.5% stake in Kerala-based Catholic Syrian Bank ( CSB), must bring it down to below 10% according to the pending cases of alleged violation of the Foreign Exchange Regulation Act so that these can be dealt with under the more liberal Foreign Exchange Management Act, which replaced the earlier law. He had been asked by RBI way back in 2007.
In 1994, Chawla bought 2.14 million shares of CSB, acquiring a 38% stake of the bank. He was given a heavy right issue of 32 lakh shares at a premium of mere Rs. 22 in Aug 2008, when the total number of shares were approx 1.3 crores, whereas the right issue to others in Feb 2009 was at a premium of Rs. 110.
Mr. Chawla has already sold 5% to Federal Bank. In June, 2009, the merger of Catholic Syrian Bank with Federal Bank was expected to be through, but did not happened because it had been opposed by the Syro-Malabar Catholic Archdiocese of Thrissur.
First week of March, 2010, Siam Vidhya Group of Bangkok had also shown interest to buy 15% stake in Catholic Syrian Bank. The share would be priced at Rs 375-400. It is also said that Siam Vidhya Group has tied-up with the Holiday Inn Group and started work on Hotel Resorts in Manali, Nainital, Nagpur and Shimla. It owns Holiday Inn Crown Plaza in Bangkok, the 200-acre Unico golf course, tin mines, land for housing and resort developments in Bangkok, Chiang Mai and Pattaya, office buildings and apartment blocks, according to Rachna Shah.
Chawla have to sell 14.5% his shares ASAP. CSB’s board will meet tomorrow to consider and to buy his share about Rs 250 crore. CSB shareholders accounted the bank valuation about Rs 700 crore. Federal Bank, which currently holds 5% of CSB's share. Three Bank Directors hold 15% of the shares of CSB. RBI official said Mr. Chawla would not face criminal charges under FERA.
Catholic Syrian Bank, head Office, Thrissur, Kerala, is India's largest unlisted commercial bank with assets of US$1.3 billion and a network of over 364 branches across India. The bank commenced business on January 1st, 1921 with an authorised capital of Rs.5 lakhs and a paid up capital of Rs. 45270/-. During the first two decades of its functioning, the Bank concentrated only in Kerala
In 1964-65, The Catholic Syrian Bank Ltd took part in taking over the liabilities and assets of five small/medium sized banks in Kerala. In 1975, the Bank attained the status of "A" Class Scheduled Bank when its total Deposits crossed Rs.25 crores.