Mehsana Urban Cooperative Bank – the second largest UCB of Gujarat is currently involved in a legal wrangle. One of its shareholders and a defeated contestant Kiritbhai Patel has filed a complaint with the Central Registrar against irregularities in the bank.
Though the Central Registrar will announce the verdict likely at the end of the month, Ganpatbhai Patel, Chairman of the bank said, “We are sure that Kiritbhai Patel will lose the legal fight and the Central Registrar will give the judgment in our favor. He (Kiritbhai Patel) is tarnishing the image of the bank as he was defeated in the election”.
However, Kiritbhai Patel’s accusation is that “The bank has disbursed loans to Ozone Procone Pvt. Ltd and Swastik Serecon Limited which are owned by Chandubhai Patel, one of the Directors close to the current Chairman. These companies have defaulted on all loans. Similarly, another director Khodabhai Patel who is the owner of Gujarat Trading Company has too defaulted, as is evident from the Statement of Accounts”, Patel said.
The Chairman of the bank has strongly denied these allegations and said both the directors of the bank have not taken any loans from the bank. Patel is making false allegations only to defame the bank.
“Chandubhai Patel’s continuance as the director of the bank violates the ruling given by the Division Bench of the Gujarat HC. Chandubhai Patel had been removed as the director in pursuance of the direction of RBI as the bank had too many defaulters”, Kiritbhai alleges.
Denying charges Ganapatbhai said, it was for RO to decide who was eligible and who was not eligible to fight the election. The RO permitted Chandubhai to fight the election, he clarified.
Accusing Vinodbhai Patel, CEO of the Bank, Kiritbhai Patel said, “His son Dhavalbhai Patel is the owner and proprietor of Shree Marutinandan Infrastructure which has taken a loan from the bank but has not repaid any instalments. “No recovery action is being initiated against the company. just because the proprietor is the son of the bank’s CEO”, Kiritbhai says.
“Yes it’s true his son’s company’s had taken a loan from the bank but it is wrong to say his company has not repaid the loan. The bank had given a loan of over Rs 6 crore but the entire loan amount has been paid by his son’s company. As soon as the order came from the Central Registrar in 2018 disallowing Multi-State banks from giving loans to CEOs’ relatives or family members, the bank recovered the amount from his company without delay,” retorted the Chairman of the bank.
Kirit Patel also accused the management of violating the act as well as bye-laws by declaring the election on short notice. Intentionally, the BOD passed a Resolution dated 31.07.2019, whereby, they declared the election and the same was published in newspapers on 02.08.2019. However, the AGM was called keeping members and shareholders of the bank in the dark, about it”. Kirit Patel alleged.
Replying to the charges levelled against him, the Chairman said “all the allegations are false and we have conducted the election on time by publishing the election schedule in newspapers.”
The election of the bank was held on September 2019 where over 65,000 shareholders cast their votes. 99 voting centers were set up across Gujarat and Maharashtra. The two panels and several independent candidates fought the election and 16 candidates won the election. “Our panel won the elections with thumping majority and we lost only one seat; 70 percent voting were in our favour”, current Chairman underlined.
Readers would recall that the UCB hogged the media headlines recently when RBI had slapped a penalty of Rs 5 crore on it.
Mehsana Urban Cooperative Bank was established on 23rd October 1983. As on 31st March 2019, the bank had a deposit base of Rs 5359 crore and advances of Rs 3667 crore. The Bank earned a net profit of Rs 67.03 crore in the last FY i.e. 2018-19.