CHENNAI: The FII backed faction led by Pioneer Asia Group’s S Annamalai has come out on top in the battle for control of the nearly 100 year old Tamilnad Mercantile Bank. Settling, at least for the time being, the hotly contested election for the Board of Directors, the Madras High Court declared as elected a list of ten directors in an interim order on Monday.
The composition of the new members of the Board of Directors has put paid to mining baron S Vaikundarajan’s bid for control, for now. However, the Court said that the order is focused towards restoring normalcy in the functioning of the bank.
“Therefore, for the present without pronouncing a final verdict on the question of validity of the votes polled by certain shareholders and without also recording a finding whether these votes have been calculated or not, we pass an order declaring the aforesaid 10 persons as having been elected.They are permitted to take charge subject to the ultimate outcome of these proceedings,” said the court.
The newly elected board will comprise of P C G Asok Kumar, S Annamalai, B Vijayadurai, V V D N Vikraman, S R Aravind Kumar, A Shidambaranthan, B S Keshava Murthy, Chitra Murali, P Yesuthasen and K Nagarajan.
The winning faction has been backed by Foreign Institutional Investors (FII), the Pioneer Asia Group, the VVD Group, Ayyanar Coffee and Tea Company.
The bank has been in the middle of a highly publicised boardroom war between the FII backed faction and the faction led by Vaikundarajan, culminating in the first Annual General body Meeting (AGM) the bank has held in nearly six years on January 29. While the election for Board of Directors was held during the AGM, the results were not released, subject to the examination of the High Court.
The Vaikundarajan led faction opposes the plan to take the bank into an Initial Public Offering (IPO), stating that this would throw open the bank to more ‘outsiders’. The TMB was initially begun as the Nadar Bank in 1921 and shares were held completely within the community until 1994, when a large group of shareholders sold 67% of the shares to the Ruia led Essar Group. Essar eventually sold the shares to entrepreneur C Sivasankaran who, in turn, sold around half the stake to a group of Nadars who had raised enough capital. The rest was sold to a group of foreign investors who managed to get their hands on 24.93%.