The Hindu : Business : FIs, Nadar Forum smoke peace-pipe

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Wednesday, Feb 27, 2008
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FIs, Nadar Forum smoke peace-pipe

Special Correspondent

Nadar community to have majority directors on the board

CHENNAI: Foreign investors (FIs), who have acquired 24.93 per cent stake in Tamilnad Mercantile Bank (TMB), and the Nadar Mahajana Bank Share Investors’ Forum, which is engaged in retrieving the bank to the community fold, have smoked peace-pipe.

The two have come forward to co-operate to take the bank, which has witnessed a battle for control, on a higher growth path, even while securing the interests of the Nadar community.

Under an agreement, the FIs have agreed to let the board of the bank be filled with majority directors from the Nadar community.

FIs to help

Addressing a press conference here on Tuesday, the forum members said that the FIs had agreed to address various concerns such as the issue of bonus shares, jobs for the community members, more dividends and the like. The members also claimed that the FIs had promised to help in the cause of social development of the community members.

The FIs entered the picture after C. Sivasankaran-led Sterling Group’s move to take over the bank was foiled by forum members. In the face of stiff resistance, the Sterling Group had agreed to sell the shares back to the Nadar community.

Out of the 67.29 per cent shares that the Sterling Group had acquired from the Ruias of the Esssar Group (who had got these through negotiated deals with a few promoter-group families in the bank in the mid-90s), the forum had retrieved 33.74 per cent from the Sterling Group.

Out of the remaining, 24.93 per cent shares were sold to around half-a-dozen foreign investors (FIs). The forum members asserted that the FIs had paid Rs. 186 crore, including an advance of Rs. 16.60 crore, to the Sterling Group for 95,418 shares with a condition to transfer 24.93 per cent to them and the balance 8.62 per cent (24,512 shares) to the members of the community who had paid money to the forum to purchase these shares.

The forum members alleged that 8.62 per cent, that is, 24,512 shares had still not been handed over to the rightful owners.

The forum, they said, would fight for the transfer of these disputed shares to their rightful owners. It also demanded the immediate convening of the annual general body meeting and reconstitution of the board.

G. Karikolraj, General Secretary of the forum, and P. S. Sathiya Seelan, former Director of the bank, were among those present at the press conference. Mr. Vangal was conspicuous by his absence, though he was to address the meeting.

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