The Hindu Business Line : TMB share transfer issue lands in court

THE issue of transferring the 34 per cent shares held by Mr C. Sivasankaran in the Tamilnad Mercantile Bank Ltd, promoted by the Nadar community years ago, as a result of the agreement reached on February 16 to representatives of the community has landed in troubled waters with the different factions having stake in the bank moving the Madras High Court to have their grievances redressed.

According to the agreement signed in the presence of the Deputy Prime Minister, Mr L.K. Advani, Mr Sivasankaran was to sell 95,418 shares of the Bank to eight individuals for a consideration of Rs 130 crore.

The Nadar Mahajana Sangam moved the High Court a few days ago and obtained a stay of the accord to transfer the shares to some of the individuals stating that the Reserve Bank of India had stipulated clear guidelines from time-to-time in regard to transfer of shares held by the Sterling Group (belonging to Mr Sivasankaran) and that these guidelines should not be violated.

However, the major group of the community, Mr B. Ramachandra Adityan, who is a presidium member of the Nadar Mahajana Bank Share Investors Forum, got the interim stay granted by the single judge suspended by a Division Bench.

The Bench, comprising Mr Justice R. Jayasimha Babu and Mr Justice M. Karpaga Vinayagam, heard the appeal filed by Mr Adityan on Thursday.

Presenting the arguments in detail on behalf of Mr Sivasankaran, Mr Vedantham Srinivasan said that it was agonising that the minority shareholders in the bank was in effect denying the legal rights of the majority shareholders.

The Court had the power to rectify this anomaly inasmuch as Section 402 of the Companies Act makes it incumbent on the part of the majority shareholders to enjoy their rights in the administration of the affairs of the company. He prayed for suitable intervention by the Bench to ensure that the company was administered in accordance with the legal provisions.

On behalf of Mr Adityan, it was submitted that the company had convened an annual general meeting on March 12, where important matters, including election of directors, were on the agenda. There should be no impediment in implementing the agreement to effect the transfer of the shares.

The Bench asked the counsel for the RBI to furnish certain information regarding the bank's guidelines in respect of transfer of shares of Mr Sivasankaran.

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