Calcutta, Aug. 23: The employees and officers of Uco Bank have decided not to participate in the bank’s Rs 200-crore maiden offer, which is expected to hit the market in September.
According to a Securities and Exchange Board of India (Sebi) regulation, the employees are entitled to pick 10 per cent of the shares on offer.
“A decision has been taken at the United Forum of Bank Unions (UFBU) to oppose the IPO. We want to protest against the government’s decision to reduce its stake in the nationalised banks,” said S. Roy Choudhury, general secretary of the All India Uco Bank Officers’ Association. Following the IPO, the government’s holding in Uco Bank will be diluted by 33 per cent.
Befi-affiliated Uco Bank Employees Association has gone a step further. General secretary Ashoke Ghosh has asked all state committee members to individually submit a letter of promise to the secretary of the state committee saying that he or any member of his family would not apply for the bank’s shares.
“Today, our bank is in a strong position. The employees have contributed in many ways, including financial sacrifices to make the bank stronger. The directors on the bank’s board are nominated by the government and are therefore accountable to the government. We feel that following the IPO, new directors will be inducted on the board and their accountability cannot be ascertained.”
The top management has already initiated moves to counter the campaign that has been launched by the officers and the employees’ union jointly.
A senior official said, “We are in touch with the regional managers and branch managers so that the employees participate in the IPO.”
The management is upset with the employees’ stand on the IPO. “The unions and the employees helped the bank to turnaround. We do not know why the employees do not want to participate in the IPO which is aimed at increasing the capital adequacy ratio of the bank.”
The bank has submitted its offer document for the maiden offer to the market regulator. The bank is looking at a premium of Rs 2 on the shares.
J. M. Morgan, Kotak Mahindra, SBI Capital Markets, Enam Financial and DSP Merrill Lynch have been appointed merchant bankers for the issue.