Thread by @caswapnilkabra

When did you last witness shareholders of a company uniting and voting against the reappointment of Managing director, CEO, Board of directors and even the auditors all in a meeting?
@Dinesh_Sairam @gvkreddi
#investors #investoractivism

Well, this is exactly what happened recently in case of Lakshmi Vilas Bank. The shareholders actively voted against the reappointment of the managing director and chief executive, as well as seven directors and auditors, at the recent annual general meeting (AGM).

Let us have a look at the rich history of LVB.

1926:
Lakshmi Vilas Bank Limited was founded in 1926 by a group of seven businessmen of Karur with the objective of catering to the financial needs of people in and around Karur who were occupied in trading businesses, industry and agriculture belonging to the Vysya community.

1960s:
The Bank saw considerable expansion of its branch network during the period of 1961 to 1965, when the bank took over nine other banks.

1970s
In 1974, the bank started expanding the branch network beyond Tamil Nadu to benefit from opportunities in the pan-Indian market. The bank thus was not just centered to one state but was wide spread.

2008
Implementation of Core Banking Solution (CBS) was started in October 2006, and all of the bank's branches were migrated to CBS by March 2008.

2018
By 2018, Lakshmi Vilas Bank had 569 branches, 1,046 ATMs and 7 extension counters.

What went wrong:
The main reason for the current plight of LVB is the fact that it forgot its main objective: serving the small businessmen of the vysya community. Over the period of time its aspiration changed to being the mainstream bank where growing is everything!

LVB has now two options:
Sell it to another bank or a finance company which wants to have a strong presence in southern India.
To merge itself into another larger bank.

But now as the board and auditors have been voted out, it seems RBI has to take an urgent call!