The Madras High Court on Friday refused to interfere with the decision taken by the Reserve Bank of India (RBI), and approved by the Centre, in November 2020 to amalgamate Lakshmi Vilas Bank (LVB) with DBS Bank India Limited (DBIL), an Indian subsidiary of Development Bank of Singapore.
Chief Justice Sanjay V. Gangapurwala and Justice D. Bharatha Chakravarthy, however, directed the RBI to value the shares and assets of both DBIL and LVB as on the date before the amalgamation and on that basis, take a decision afresh on reduction of value of shares and writing off Tier II bonds.
The court held that the value of the shares of LVB ought not to have been reduced to zero without evaluating the shares of DBIL and LVB and determining the swap ratio which was highly essential to save the interests of the shareholders and the bondholders who had approached the court against the merger.
