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S&L Seminar Slated on Takeovers : Some Participants Fear Retaliation by Federal Regulators

July 31, 1986|JAMES S. GRANELLI | Times Staff Writer

A group headed by a former executive of American Diversified Savings & Loan Assn., which was taken over by regulators earlier this year, plans to hold a seminar next month on how industry executives and their loan customers can "protect" themselves from the effects of government takeovers.

It is such a volatile subject that some S&L industry officials don't want name tags used, according to Bob Mehta, president of the newly formed National Institute of Thrift Executives.

Mehta was president of one of American Diversified's subsidiaries. He lost that job in the Feb. 14 takeover by state and federal regulators and currently heads a company called CIB Development Corp.

Some top-name speakers--including Sen. Alan Cranston--have been lined up for the Aug. 29 seminar in Los Angeles, but some potential attendees fear repercussions from federal regulators, particularly the Federal Savings and Loan Insurance Corp., if they are identified, Mehta said.

While Cranston will be talking on the controversial proposal to recapitalize FSLIC, most of the remaining talks and discussions will center on FSLIC's role in taking over and managing S&Ls and the havoc regulators wreak on others.

"What the S&L people are worried about is if they're seen speaking out against the system, they'll be threatened," Mehta said. "It tells something about the paranoia in the industry."

Share Office Space

The unorthodox American Diversified and its major owner and operator, Ranbir Sahni, were frequent targets of criticism by Edwin J. Gray, chairman of the Federal Home Loan Bank Board, which oversees FSLIC.

Sahni and Mehta run separate development companies, but they share office space in a Costa Mesa building next to American Diversified's offices. Mehta runs the fledgling National Institution of Thrift Executives from his office.

Like many other S&L officers who lost their jobs when their associations were taken over by regulators, Sahni is embroiled in a lawsuit with FSLIC.

Because of that, he said he will not be a speaker, although he plans to attend the seminar.

Lester Day, American Diversified's former president and owner of about 4% of the company's stock, is scheduled to talk about the personal, social, economic and professional after-effects of a government takeover.

The S&L industry, however, is not the only party concerned with FSLIC takeovers, according to Beverly Hills lawyer Gary S. Smolker, another speaker on the program.

'Shed Light' on FSLIC

The purpose of the seminar is to "shed light" on the FSLIC, "one of the nation's most secretive agencies," Smolker said.

While FSLIC is concerned about depositors, it ignores the other major group of customers--the borrowers--he charged.

In one case, he said, a real estate developer's $23-million construction loan from Salt Lake City S&L was halted when FSLIC seized the association--even though the project was 85% complete and only $3 million of construction funds were left to be disbursed.

It took FSLIC almost six months to review the loan, Smolker said, and in the meantime, the project was damaged by a heavy snowfall.

Then, he said, FSLIC took over another lender that was participating in the loan and started the review process again. More than 18 months after the first takeover, Smolker said, the developer now needs $11 million to complete the project and still awaits approval.

A bank board spokesman would not comment on Smolker's story.

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