Four of the suspended board members of the Bank of Kathmandu, along with chairman of the suspended board Sanjaya Bahadur Shah and one another board member on Tuesday filed two separate writ petitions at the Supreme Court against the decision of the Nepal Rastra Bank.
One of the members, who filed the writ petition, said the NRB's move to take over the bank's management under the NRB Act 2063 (Section 54) was 'unjustifiable' as the bank's financial health was sound and the interests of BoK's promoters and depositors were not at stake.
The central bank is empowered to take over the management of any financial institution under NRB Act 2063 (Section 54) if it is dissatisfied with the explanation it has sought.
The NRB took over the bank's management on May 19 to safeguard the interests of investors and promoters, which was 'allegedly' at stake due to growing dispute among the board members. The suspended board members cannot hold any position in any financial institution for another five years.
"The decision to call back managing director Radhesh Pant from his post was a majority decision," a board member argued, adding that majority of the board members could take the decision.
The central bank took the decision in an emergency board meeting on May 19 after it received two separate letters of clarification from BoK on May 17.
The crisis precipitated following the 313th board meeting of BoK on March 22, when it was decided to recall Pant from his post. Though the decision was taken by a majority of the board members, the disgruntled members had urged the central bank to intervene. Four directors took the decision against Pant, while the remaining two -- Sitaram Thapaliya and Sudarshan Poudel -- were against the decision.
Later, the disgruntled board members knocked on NRB's door. The central bank had sought explanation following a dispute over the BoK board's move to recall managing director Radhesh Pant from his post.
The NRB has suspended the BoK board and sent a four-member team, led by director Laxmi Prapanna Niraula, who will work with acting CEO Sabin Lal Shrestha. The NRB takeover is for a short period of three months. It will hand over the management to the new board members after the AGM within the next three months.
A board member, Deepak Narsing Shrestha -- who was not in the board meeting that took the controversial decision -- also filed separate writ petition against the NRB decision.
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