Clean Break

The Sampath Bank led consortia is expected to infuse Rs. 700 mn into the under capitalised Union Bank.
Union Bank shareholders gave their approval to raise the authorise capital by another billion rupees to Rs. 2 bn, issue special class of shares and increase the size of its board.rn

rnSampath Bank and the Chinkara group are tipped to invest Rs. 250 mn each, with other investors including National Savings Bank taking up the balance.rn

rnThe new investors will be issued a special type of ordinary shares called lquote Class A. Class A shareholders will have wider powers and voting rights over ordinary shareholders.rn

rnThey would not get dividends, but would convert their stakes into ordinary shares when Union Bank turns profitable.rn

rnThe current five-member board will be increased to 15. A special committee is expected to run the bank under the guidance of the new management. rn

rnSources said Union Banks former chief S Balalle is due to make a come back as a member of the special committee.