Shares of private lender Dhanlaxmi Bank dropped as much as 9% on Monday before recovering partially, after Sridhar Kalyanasundaram, an independent director, quit over the weekend, citing differences with the board on matters including the bank's rights issue and capital position.

The bank's shares were down 3.25% at 28.20 rupees as of 10.20 a.m. IST.

Kalyanasundaram was appointed as independent director of the Thrissur, Kerala-headquartered bank in December 2022. The bank is currently led by Chief Executive Officer Shivan J.K., who did not immediately respond to a Reuters request for comment.

In a letter dated Sept.16, sent to the exchanges on Sunday, Kalyanasundaram said he raised questions over a planned rights issue of the bank, which remain unresolved.

Kalyanasundaram also alleged that he was threatened of being "sacked from the bank" for raising these concerns.

He further said certain concerns - including one over a recent one-time settlement with a corporate debtor - raised by him regarding "irregularities" in the way the bank's board and committee meetings were being held were "brushed away."

Kalyanasundaram wrote that the bank had regularly dismissed whistle-blower complaints even though some contained material allegations.

Dhanlaxmi Bank, with assets of just over 151 billion rupees as of March 2023, has seen an unprecedented executive churn over the years and is under heightened scrutiny by the Reserve Bank of India which has placed two directors on its board.


(Reporting by Chris Thomas in Bengaluru and Ira Dugal in Mumbai; Editing by Dhanya Ann Thoppil and Nivedita Bhattacharjee)