Deal between LVB and DBS: HC asks RBI to reevaluate the value

The Madras High Court has requested that the RBI value the assets and shares of DBS Bank India and Lakshmi Vilas Bank as of the day before to their merger in November 2020. Within four months, RBI has been requested to make a new determination about the write-off of the tier-2 bonds and the decrease of the share value based on the revised valuation.

The ruling was made in a lawsuit brought by LVB’s bondholders and minority shareholders opposing the bank’s write-down of their investment, which was submitted prior to LVB’s merger with DBS and after the bank was placed under moratorium.

The court said in its ruling that it was not meddling in the choice to combine LVB and DBS. The order stated that a review of the decision should be conducted “keeping in mind the grievances of the shareholders and the bondholders and the hardship faced on account of the scheme of compulsory amalgamation and amelioration of the same to the extent possible” because a number of the bondholders are similar to the depositors.