Lulu Group agrees to buy 4.99% stake in CSB; bank gets new MD

Kerala-based Catholic Syrian Bank (CSB) has agreed to sell 4.99 percent of its stake, currently being held by Thai businessman Sura Chanrichawla, to Dubai- based Kerala businessman Yusuffali MA, CSB Chairman S Santhanakrishnan said.

Last Updated: Feb 12, 2013, 22:57 PM IST

Mumbai: Dubai-based Kerala businessman Yusuffali MA, who runs the largest retail chain Lulu Centre in the UAE, has agreed to pick up 4.99 percent stake in Catholic Syrian Bank from its largest shareholder Sura Chanrichawla and is awaiting RBI nod, said bank Chairman S Santhanakrishnan.

The CSB chief said he has appointed Rakesh Bhatia from HSBC Group as the new Managing Director, who has also picked up around 1 percent in the Thrissur-based unlisted bank.

"The Lulu Centre promoter has agreed to pick up 4.99 percent stake in CSB from Bangkok-based NRI businessman Chanrichawla, and is awaiting RBI approval. If the regulator allows, Yusuffali is willing to pick up another 3 percent stake from Chanrichawla," Santhanakrishnan told PTI from Chennai today.

When contacted in Dubai, Yusuffali's office said he is touring Europe, and thus could not elicit his comment.

If the deal goes through, Chanrichawla could partially meet the March 31 RBI deadline to bring down his stake in the 93-year-old lender to under 13 percent from the present 18 percent.

"Another nearly 1 percent stake of Chanrichawla has been picked up by Rakesh Bhatia, who is the new Managing Director of bank," Santhanakrishnan said.

Santhanakrishnan further said, "Bhatia, who comes from the HSBC Group, is bringing in Rs 7.5 crore to the bank apart from his vast experience. Bhatia has already put in around Rs 6 crore for around 1 percent stake and he is committed to invest another Rs 1.5 crore."

The RBI has made its prior approval mandatory for any stake sale in CSB running into more than 1 percent of its total shares, unlike other banks where an investor is free to buy up to 5 percent equity.

Mumbai-based brokerage Edelwiess holds 4.99 percent in the bank, while around 14 percent is owned by three Hong Kong-based funds.

The Bangkok-based NRI businessman Chanrichawla has got many extensions from the RBI since 2010 to trim his stake. The current deadline to do so is March 31.

Though many times he could identify an investor in the past, the NRI failed to satisfy RBI with the prospective buyer. Still over the years, Chanrichawla has trimmed his stake to 18 percent now from a high 34 percent initially.