DBS Group faces legal action after Lakshmi Vilas Bank acquisition
Southeast Asia’s largest money-lender, DBS Group Holdings Ltd., is now facing lawsuits in India in relation to their recent take-over of the Lakshmi Vilas Bank Limited.
Legal action has been taken at Lakshmi Vilas Bank. According to a statement made by DBS, Bloomberg News reported, “The grievance that has been raised is that equity shares and Tier-II bonds were written off before the effective date of the merger.”
Holders of the Bank have filed lawsuits in various high courts in India against DBS’s local unit. DBS, a Singapore-based lender had completed this acquisition of the indebted bank in November last year. This was the first time in history that the Reserve Bank of India had permitted a foreign institution to acquire a struggling local bank.
DBS, however, has remained calm and has voiced its wishes to resolve this issue without any obstacles and said that, “DBS has no incremental unprovided risks on these lawsuits. Other legal liabilities in the normal course of business have also been suitably provided for.”
According to Piyush Gupta, the CEO of DBS, the firm expects Lakshmi Vilas Bank to become profitable within a year or two as it puts away targeted amounts of capital for the merger expenditures and allocation of spoiled assets.