BoK defends move to sack MD

KATHMANDU: Bank of Kathmandu on Sunday said its decision to call Radhesh Pant back from the post of managing director of the bank was ‘an internal matter and normal process.’

Sanjay Bahadur Shah, chairman of the board confirmed to The Himalayan Times that the bank had furnished the answers to questions that Nepal Rastra Bank asked it after the dispute between the Board of Directors reached the central monetary authority. “We have answered all the questions of the central bank,” he added.

In the written explanation furnished by the bank’s board today — the last day of time given by the central bank — it said that ‘everything was fine and dandy’.

The central bank — Nepal Rastra Bank — had asked the BoK board to furnish answers under the NRB Act 54 (1) why it should not act against the bank. The bank was given seven days to answer.

The 313th board meeting of the bank on March 22 had taken the decision of calling back Pant from the post of managing director by a majority. The board has seven members including Pant. Four directors, two each from promoters and public, upheld the decision against Pant while the remaining two did not oppose then. But later they wrote letters to NRB asking for its intervention in the matter.

The unsatisfied group also furnished its answers to the central bank today. The central bank will take up the matter in its board meeting.

However, corporate honchos fear that the decision of the BoK could be a precedent. “Such a decision will have a long-term impact on the whole financial sector,” a board member said adding that this case of BoK is nothing but the NRB decision can have an impact on the whole financial sector.

Chairman Shah had dubbed the action as a strategic initiative of the bank while looking towards the future. A majority of BoK’s shares are with the public. Only 42 per cent are with the promoters, making it the only private bank in the country which has 58 per cent public shareholders.