TMB seeks RBI nod to hold much-delayed AGM

CHENNAI, July 16: With the Company Law Board (CLB) `washing its hands off' the ownership dispute in cash-rich Tamilnad Mercantile Bank (T...

CHENNAI, July 16: With the Company Law Board (CLB) `washing its hands off’ the ownership dispute in cash-rich Tamilnad Mercantile Bank (TMB), the bank board has decided to approach the RBI for permission to hold two delayed annual general meetings (AGMs).

The bank had not been able to hold shareholders’ meetings for the past two years due to a disputed and aborted takeover bid by the Essar group. The CLB’s recent refusal to pass a verdict on the issue had created a `stalemate,’ a senior director of the bank told PTI today. The bank had sought clarification from the board on whether the AGMs could be held in view of almost 70 per cent of shares and the respective voting rights being under dispute with the Essar group and NRI industrialist C Sivasankaran, who subsequently bought the stake from Essars, being denied registration in their favour.

The CLB, the director said, refused to answer any of the three queries raised by the bank on the grounds that its order of 1995, directing the bank to register theshares in favour of Essars, had been made null and void by the RBI. The prolonged and complicated ownership dispute had hardly affected the performance of the bank, which reported a net profit of Rs 38.15 crore and reserves and surpluses of Rs 151.07 crore for 1997-98 on a meagre equity base of Rs 28 lakh.

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Meanwhile, the Nadar Mahajana Bank Share Investors’ Forum, which is spearheading a campaign to buy the shares back from the acquirers on the grounds that the bank’s ownership must always rest with the backward Nadar community members, has organised a meeting of potential investors on July 26 at Coimbatore. The investors, who are members of the Nadar community and had contributed money to buy back the shares, would be told about the forum’s next strategy to get the shares from the Sivasankaran family. Forum chairman B Ramachandra Adityan told PTI that the body had collected about Rs 35 crore and had got commitments to the tune of another Rs 25 crore from Nadar members.

This was sequel to last year’stripartite meeting with the Essar group and Tamil Nadu Chief Minister M Karunanidhi, where the Chief Minister asked community leaders to collect Rs 100 crore to buy back the shares. In the Coimbatore meeting, the forum would give three months’ time to Sivasankaran to sell back the shares for a mutually-agreed sum, failing which the forum might approach the original sellers of the shares to legally rescind the sale offer, Adityan said.

While the forum was interested in an out-of-court settlement, Sivasankaran was not coming forward for talks, he added.