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  1. TMB to hold pending AGMs in January as court vacates stay

TMB to hold pending AGMs in January as court vacates stay

Paving the way for an initial public offering (IPO), Tuticorin-based Tamilnad Mercantile Bank (TMB) will hold its pending annual general meetings (AGMs) on January 29, 2016.

By: | Published: December 24, 2015 12:34 AM

Paving the way for an initial public offering (IPO), Tuticorin-based Tamilnad Mercantile Bank (TMB) will hold its pending annual general meetings (AGMs) on January 29, 2016. The six pending AGMs are being hold as the Madras High Court recently vacated the stay on the same.

Once the AGMs are held, the bank would be in a position to take a decision on the proposal to hit the capital market through an IPO.

The TMB’s management, dominated by the Nadar community, was restrained from holding the AGMs by the court, acting on a writ petition by a shareholder regarding the ownership tussle between groups of the community and some foreign investors.

The 87th AGM of the bank was held on January 6, 2010 and the 88th AGM was scheduled to be held on June 6, 2011. However, the high court had ordered injunction in 2011 on the same.

“The Madras High Court by order November 26, 2015 vacated the said order of injunction and directed the bank to convene and hold all the six AGMs on a single day within 70 days from the date of the order of the high court. The bank is taking all the necessary steps to complete the process of convening the said meetings and hold the same on January, 29, 2016 and transact the business slated therein,” TMB said.

TMB has been in the news ever since Ramesh Vangal-led foreign investor group bought out shares of the bank to take control of the lender in 2007. Vangal was the promoter of the Bangalore-based Katra group.

The bank’s problems actually started in 1994 when a factional feud within the Nadars led to two shareholder groups selling their 25% stake to the Ruias of Essar. Subsequently, the Ruias raised their stake to 67% with an eye on management control. However, in view of RBI’s objection to an industrial group holding a stake in a community-led bank, the Ruias decided to rethink their plan.

When it was known that the Nadars didn’t have the money for the buyback, businessman C Sivasankaran stepped in on behalf of the community and bought Essar’s stake. The serial investor’s plan was to sell the shares back to the Nadars for a premium.

For nearly 10 years, the Nadars struggled to pay him and in 2007, Sivasankaran sold the share to a clutch of FIIs, sparking a string of protests and legal battles at the bank.

In 2007, a group of foreign investors led by Vangal bought out the 24.93% holding of the Sterling group, promoted by C Sivasankaran, for Rs 186 crore. The investors were Vangal/Katra Holdings (10,364 shares, 3.64%), Rajat Gupta (14,080, 4.95%) Ravi S Trehan (2845, 1%), Kamehameha Mauritius (2025, 0.71%), Cuna Group Mauritius 2025, 0.71%), FI InvestmentsMauritius (5399, 1.90%), Swiss Re Investors (10124, 3.56%), Gokul Patnaik (10589, 3.72%) and Vector Program (13455, 4.73%).

Even though faced with boardroom tussle, TMB has reported a healthy growth. It has been taking steps to include corporate customers for its lending portfolio.

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Tags: IPO

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