IDBI officers allege LIC deal violates status quo assurance

New Delhi: The All-India IDBI Officers Association has alleged that the board decisions to allow LIC to up stake in the bank to 51 per cent and hand over management control was in violation of oral assurance on maintaining status quo given to the court which has not given its approval.

In a writ petition in the Delhi High Court, the IDBI officers have submitted that “the respondents are attempting to make investments/acquisition into a fait accompli and irreversible so that the entire proceedings before the court get frustrated and the petitioner shall have no remedy available.”

It further said the respondents had given an oral undertaking by assuring that the status quo regarding the proposed acquisition of 51 per cent would be maintained. However, they have violated their own assurance since further progress is being made in furtherance of the acquisition.

IDBI Bank on October 4 allotted about 33.99 crore equity shares to LIC at a price of Rs 61.73 per share (inclusive of premium amount of Rs 51.73 per share) aggregating up to Rs 2,098.19 crore through preferential issue. This allotment follows approval by the bank’s board to the preferential allotment of equity shares to LIC aggregating up to 51 per cent of post issue paid up capital of the bank.