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Federal Bank announces 70 per cent dividend

By Our Staff Reporter

KOCHI, SEPT. 27. The Federal Bank's 73rd annual general meeting (AGM) was convened here today amidst speculations that the ICICI Bank, which owns 20 per cent shares, may take strategic initiatives to exercise more control on the former. The AGM adopted a resolution to pay 70 per cent dividend to the shareholders.

The alleged move for appointment of nominees favoured by the ICICI Bank to the Director Board and the bifurcation of the office of the Chairman were contentious issues that had come up for discussion at the AGM.

Of the six nominees to the board of directors, P.C.Chacko, a former Director and Congress leader, announced withdrawal of his nomination. The other nominees were P.H. Ravikumar, Managing Director of National Commodities and Derivatives Exchange (NCDEX), P.C. Cyriac, former Chairman of Rubber Board, A.M. Salim, Director of TKM Institute of Management, C.J. George, Managing Director of Geojit Financial Services, and K.P. Fabian, IFS, former Ambassador to Italy and the son-in-law of the bank's founder, K.P. Hormes.

While acknowledging that the ICICI Bank was urged to nominate a Director when it acquired 20 per cent stake in Federal Bank, Mr.Chacko said he had expressed reservations against the former's motives.

`Two power centres'

K.P .Fabian was of the opinion that splitting the authority of the Chairman would create two power centres. He also felt that a change in the present set-up was uncalled for as the bank was doing well. Ivan, another shareholder, said any apprehension on takeover should focus on whether such a move would be beneficial to the shareholders.

About a dozen shareholders spoke on the occasion. They included Baiju Mani Paul, K.P. Chackochan, Paulose Parackal, Mathew Paul, M.L. Paulose, P.A. Jose, P.D. Jacob, A.J. Thomas, M.P. Augustine, P. Subrahmanyam, Kunjuvareeth, M.B.Vijayakumar and T.N. Thankappan. Most of them highlighted the doubts cast over the future of the bank.

Responding to some of the queries that came up, the Chairman, K.P. Padmakumar, disclosed that the bank had not taken up any loans of ICICI Bank.

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