Kirit Somaiya of IGF raises key questions on UWB's Moratorium

Mumbai, Sep 4 (UNI) Investors' Grievances Forum (IGF) headed by Dr Kirit Somaiya today expressed his displeasure over the Central Government's decission of moratorium on the United Western Bank Ltd.

Briefing newspersons here Dr Somaiya, who is also the Ex-Member of Parliament from Bharatiya Janata Party (BJP), affirmed, ''The Government (at the centre) acted in haste in issuing the Order of Moratorium on UWB as just six months back the Bank was healthy and wealthy and a Rights Issue was also allowed by both regulators RBI and SEBI.'' IGF president raised a question as to why RBI did not ask merger first before declaring moratorium of UWB, like it was done in the case of Global Trust Bank that was taken over by the Oriental Bank of Commerce.

Seeking protection for deposit holders and small investors, Mr Somaiya pointed out that the small investors account for 59 per cent of the UWB's paid up capital and the employees held over eight per cent of the shares.

He expressed his skepticism over the Federal Bank's interest in the acquisition of UWB. Mr Somaiya even charged that this bank (Federal Bank) - which took over the Ganesh Cooperate Bank at Kurundwad in Maharashtra - is still to pay the compensation to the shareholders of the Ganesh Cooperative.

He also demanded that the Government should demand an explanation form the two merchant bankers - A K Capital and Tantrum that how did they arrive at the valuation of Rights Issue of UWB six months back at Rs 24 per share, if the bank was not healthy enough to run.

UNI SN MJ SKB1942