TMB reinstates all 10 directors after HC order

Written by Sajan C Kumar | Chennai | Updated: Nov 30 2009, 05:48am hrs
The Nadars-controlled Tamil Nadu Mercantile Bank (TMB) on Friday recast its board of directors by inducting all the 10 members of the Sivanthi Adithyan group. This follows a Madras High Court order issued on Thursday, which upheld the election of all these members. The boardroom struggle for the age-old cash rich bank may now see a temporary lull, but is bound to intensify during the next annual general meeting of the bank, scheduled for December.

TMB has been in the eye of a storm with two powerful factions of the Nadar community, the Nadar Mahajana Sangam led by Sivanthi Adithyan and a group headed by B Ramachandra Adityan, a former executive director of the bank, fighting for management control. The bank, which held an urgent board meet here on Friday to chalk out its future plans in the wake of the Court verdict, decided to reconstitute the board as a first step towards normal board-room operations.

The bank had been functioning with a truncated board of three, which included MD and CEO G Nagamal Reddy and two RBI nominees. The board was authorised to take decisions relating only to day-to-day activities. TMB had been under constant RBI vigil, with the apex bank holding monthly review meetings to assess the financial health of the bank.

The Madras High Court on Thursday had put an end to the 16-month uncertainty over the control of the bank. We have held our full-fledged board meeting in Chennai and all 10 directors have officially been taken charge, G Nagamal Reddy, MD & CEO, TMB, told FE. F C Sekhar, VVD Vikraman, P Mahendravel, S R Arvind Kumar, D Prabhakar, T Raj Kumar, Shankar Jagannathan, Vedanayagam, Ganapathy and Jesudasan have been elected to the board. All these board members represent the shareholders of the Nadar community, the original promoters of the bank in 1921.

Justice V Ramasubramanian, in his order, has set a deadline of December 31, 2009 for holding the 86th annual general meeting (AGM) of the bank. The ten directors will hold their offices till the AGM, the order says. We are still holding discussions over holding the AGM by the time stipulated by the court, said Nagamal Reddy, adding that they may hold another board meeting soon to finalise the date. The bank did not hold an AGM for three years due to the factional war. Nagamal Reddy said, The Court has given us its approval to have a full-fledged board and RBI nominees are there to monitor everything that takes place.