Daijiworld Media Network - Mangaluru

Managluru, Mar 23: Five of the thirteen elected directors of Mangalore Catholic Cooperative (MCC) Bank, Mangaluru have resigned alleging mismanagment and irregularities in the functioning of the board which is led by chairman Francis Cutinha.

The directors who have resigned are former chairman Melwyn D'Cunha, former vice chairman Dr Edward Nazareth, former vice chairman Prof Edmund Frank, Adolphus Cutinha and Shalet Pinto.

In his resignation letter dated February 26 (a copy of which is with Daijiworld) Melwyn D’Cunha had stated, "Ever since the constitution of the new board in September 2013, the present chairman was dominating the board of directors and the management of the Bank was conducted undemocratically. The directors who have resigned were not taken into confidence by the chairman and his team in the board of directors."

A press statement signed by all these five directors made available on March 18 states, "It may be recalled that when Melwyn D’Cunha and his team took over the management of the Bank in 2008, the MCC Bank was in a bad shape. At the end of five years, when they completed their term, the Bank had undergone a facelift with improvement in all aspects. The business turnover which was around Rs 125 crore in 2008 had crossed to Rs 400 crore with net assets increased more than two fold, from Rs 3.32 crore to Rs6.76 crore. The deposits which were around Rs 92 crore in 2008 increased to Rs 256 cror and the loan disbursed rose from Rs 43 crore to Rs 156 crore. The Bank had stopped paying dividends to its share holders from 2002 and it was resumed from 2009. The staff of the Bank got promotion which was long overdue and also had substantial salary hike. A few of the branches were shifted to new premises and the founder branch at Hampankatta got a facelift with full airconditioning. The Bank had upward growth with all the 16 branches showing profit. The core Banking solutions were installed and there were plans to get ATM.

"Even though Melwyn D’Cunha, the previous chairman and Dr Edward Nazareth, Adolphus Cutinha and Prof Edmond Frank, previous directors were re-elected with maximum votes, their expertise was not used by the present board. They were not included in the sub-committee and the subcommittees had members who had no experience. But majority of the policy decisions were being taken in these inexperienced sub-committees," the statement alleges.

Melwyn D’Cunha has stated in his resignation letter: "Because of the lack of professionalism and the groupism resorted to by the chairman, the progress of the Bank was curtailed. The deposit growth is sluggish and the credit take off is absolutely nil. In other words, there is negative business growth in the Bank. The CD ratio has fallen to the level of 50%, (which was more than 63 % during the previous term) indicates that the Bank has been losing its market share continuously."

The directors who resigned have also alleged in a media release that 'About 600 grams of gold is missing from the founder branch. The gold pledged was over-weighed and the loan given was more than the net value of the gold. Even after this was discovered, the present board did not file police complaint but rather supported the guilty officials and allowed them to have safe exit. This would have severe repercussion and the authorities might take stringent action against the board for its inactivity. There are several other similar irregularities like appointing junior staff on contract basis, promoting a few staff of their choice to higher position even when they are not eligible to the posts."

Melwyn D’Cunha and other directors have opined that 'When the Bank was passing through a downward trend in business, mass appointment of contract workers was not necessary for the Bank'.

Melwyn D’Cunha and other four directors have also stated that their plea to set right the irregularities was not considered and they do not want to be a party to the mismanagement of the board.

After rendering their resignations on February 26 and the Bank ackolwdging the same on March 2, the above mentioned directors received a letter from the Bank management on March 8 to reconsider their decisions.

On March 9, they wrote a letter to the general manager saying they were ready to reconsider their decisions subject to some conditions. But thereafter that they have not received any communication from the Bank, they said.

As per rules if there is no withdrawal of resignation after 14 days of tendering the resignation, then it is considered as accepted.

When contacted by daijiworld, chairman of the Bank Francis E Cutinha declined to comment on the issue.