Shares of Jammu & Kashmir Bank (J&K Bank) plummeted nearly 20 percent in opening deals on Monday after the Jammu & Kashmir government removed the chairman and managing director (CMD) of J&K Bank, Parvez Ahmed and appointed the bank’s executive president, RK Chhibber as interim chairman.

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The stock fell as much as 19.9 percent, hitting the lower circuit, to Rs 47.60 per share on BSE. At 9:37 AM, the stock was trading 17.4 percent lower at Rs 49.10 per share a compared to 0.87 percent (346 points) rise in BSE Sensex at 39,962.

"The Government of Jammu and Kashmir has taken the following decisions in exercise of the powers under Article 69 (iii) of Articles of Association of the Jammu and Kashmir Bank Limited:- (i) Mr Parvez Ahmed, Chairman cum Managing Director shall cease to be Director on the Board of Directors of the Bank and consequently be no longer the Chairman cum Managing Director of the Board. (ii) Mr RK Chhibber, is hereby nominated as the Director on the Board and may be further appointed as the interim Chairman cum Managing Director of the Board," the government order said.

The Anti- Corruption Bureau (ACB) has registered a case under the Prevention of Corruption Act against the J&K Bank for having allegedly made 'illegal and fraudulent' appointments in the bank.

The ACB also raided the bank’s Srinagar-based headquarters including the office premises of the former chairman.

Reacting to the news, Ahmed said on Twitter, “Absolutely no regrets. Did my job most diligently, honestly and in the best interest of the institution. Open to scrutiny on each and every transaction I have done during my two decades of functioning in the bank.”

In a statement issued on Saturday, the state government said that the change in leadership at J&K Bank was done to improve the governance and functioning of the bank. It also announced the formation of a search committee to identify a suitable panel for appointed to the board of directors and subsequently, for consideration as managing director.

Ahmed was appointed chairman in October 2016 and his tenure was to end in five months.

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First Published:Jun 10, 2019 9:51 AM IST