Merger With Federal Bank
Aluva-based Federal Bank in 2008 has proposed the merger with CSB. The other largest shareholder in CSB is Thailand-based NRI, Surachan Chawla with a 21% stake. After the Reserve Bank of India’s mandate to bring down his stake to 10% per cent, Chawla reduced his exposure to 21% in 2008 from 34 per cent in 1994. While Federal Bank and L&T hold 5% each, a group of local investors hold close to 14%, the Mauritius-based AIF Capital India owns 15%, Edelweiss has 2% and the rest is held by the public. Chawla has also agreed to sell his stake to Federal Bank, but the value is not known. Chawla and AIF Capital Development have one man each on the eleven member board. Federal Bank had mandated KPMG to conduct a financial due-diligence in September, 2009 to consider the merger proposal between the banks. It is learnt that KPMG valued CSB at a little over Rs 400 crore, on the basis of which Federal Bank made an offer. In 2010, official in the CSB close to the development said that any hopes of a merger can be given a burial after due to differences over valuation.
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