Ramesh Vangal team buys Sterlings 25% stake in TMB

Written by Corporate Bureau | Chennai, Feb 26 | Updated: Feb 27 2008, 05:59am hrs
Tamil Nadu Merchantile Bank (TMB) on Tuesday formally announced that a foreign investors' consortium led by Ramesh Vangal had paid Rs 186 crore to Sterling Group, controlled by NRI businessman C Sivasankaran, to buy its 95,418 shares aggregating 24.93% stake in TMB. The balance 8.62% shares i.e.( 24,512 shares) are to be transferred/distributed to members of the Nadar community who have paid money to the forum for purchase of Tamilnad Mercantile Bank shares.

TMB had signed a compromise memo in the Chennai High Court with the NRI Ramesh Vangal-led consortium about two weeks back. As per the agreement, the Wangal-led consortium of foreign investors will not increase its shareholding in TMB any further. In the event of an exit by this consortium on commercial interest, the Nadar community will have the first right of refusal.

The memo also mentions the appointment of a HRD committee manned by Nadars and creation of a foundation to help the under privileged from the Nadar community. Moreoever, preferential treatment will be given to Nadars in recruitment and majority of the board members will be professional Nadars.

TMB will be holding its AGM on April 11 in Tuticorin where it will elect its new board of directors. The AGM will also discuss corporate governance in TMB. By March 31, TMB hopes to do business worth Rs 14,000 crore. It is expected to have Rs 820 crore in reserves and there are nearly 200 TMB branches in operation at the moment.

TMB plans to open 500 branches by 2013 and expects business to touch the Rs 50,000 crore during this period. It also plans to open a banassurance channel and retail lending accounts nearly 67% of its total business. Fee-based income will outweigh interest-based income in the near future, said Tamil Arasu, a former director of the bank.