Jaffer Sharief, others move High Court for stay order

The former Union Minister Jaffer Sharief and others on Monday moved the Karnataka High Court seeking a Central Bureau of Investigation probe into the affairs of the Amanath Co-operative Bank Ltd.

The petitioners have sought a stay order on the proposal for merger or amalgamation initiated by the board of directors of the bank while alleging that the proposal would make the bank lose its identity.

To write off all debts and dues to the bank from those who have borrowed funds, and to save their skin, members of the management pressed Canara Bank and the Reserve Bank of India for a merger of the bank with Canara Bank. Canara Bank has shown interest in the merger, which, however, will jeopardise Amanath Bank, the petitioner said.

They have sought the court’s direction to allow the petitioners, shareholders, customers and depositors to pump in the required funds to bring the bank back to its normal financial status and also to assure prompt repayment to its depositors.

They have alleged that the board of management of the bank violated the rules and advanced loans to board members’ kith and kin as pointed out in the report of the Reserve Bank of India.

The report made it clear that loans were given to Azad Star and Royal Transport, K.K. Overseas Trading Corporation and R.K. Construction Group in which the then president of the bank had “financial control”.

Despite many representations, the bank had failed to take action to recover dues from borrowers, the petitioners said.

Justice B.S. Patil, before whom the petitions came up for hearing, ordered issue of notices to the State, the bank and others while adjourning further hearing to October 7. The bank, which has established in 1977, has 11 branches — seven in Bangalore and one each in Mysore, Mangalore, Belgaum and Gulbarga — with 44,000 shareholders and 2.2 lakh customers and 325 employees.

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