By IANS
Chennai : The powerful Nadar community hopes to get back control of the private sector Tamil Nadu Mercantile Bank by fielding 10 candidates for the post of directors in the upcoming annual general meeting.
The Nadar Mahajana Sangam and the Nadar Mahajana Bank Share Investors Forum will field the candidates at the meeting in April, and they are confident of unseating the existing members, said Tamil Arasu, a former director of the bank.
“The time has come for the bank to have a professional board,” Arasu told reporters here Tuesday.
His confidence comes from the fact that a group of foreign investors controlling the 24.93-percent stake in the bank decided to work with the Nadars.
The group, led by Ramesh Vangal, acquired the stake for Rs.1.86 billion (around $45 million) from C. Sivasankaran-promoted Sterling group at Rs.24,182 per share.
The Tuticorin-based Tamil Nadu Mercantile Bank transferred shares in favour of the investors after the central bank approved the deal, which was facilitated by B. Ramachandra Adityan, a former director, and M.G.M. Maran, chairman.
The foreign investors are aligning with the Nadar Mahajana Sangam as they do not want to be caught in the legal crossfire between Adityan and the Sangam and risk their investment.
Asked about the safeguards taken to prevent the foreign investors from selling off their stakes to another non-Nadar group, Arasu said: “The Sangam has the right of first refusal when the foreign investors decide to exit the bank.”
According to a memorandum of understanding signed between the Nadars and foreign investors, the Sangam can nominate the majority members to the board. “The foreign investors have agreed not to increase their stakes in the bank.”
Speaking about the future plans of the bank, Arasu said: “By 2013, we would like the bank to do a total business of Rs.500 billion, with 500 branches. Presently the bank has 200 branches.”
The bank would first issue bonus shares to reward the shareholders and then come out with an initial public offering, he added.
According to Arasu, the Sangam and the forum would continue their struggle to see that all those small investors who have contributed money to buyback the shares from the Sterling Group get their due shares.