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Section of TMB shareholders to challenge recent election

Our Bureau

Chennai , March 18

SHAREHOLDERS of Tamilnad Mercantile Bank who claim to hold a substantial equity in the bank are to challenge the recent election of 10 members to the bank's board.

The counsel representing the shareholders submitted to the Company Law Board (CLB) here today that they would file an interim application challenging the elections.

The counsel made the submission after a report was submitted to the CLB of the proceedings of last week's election at the annual general meeting in Tuticorin.

It may be recalled that the annual general meeting of the bank for the seven-year period between 1997 and 2003 was conducted on the orders of the CLB. Elections to fill 10 vacancies on the board were also held, with 44 contenders, and chaired by Mr S. Ramalingam, a retired judge of the High Court.

The bank's counsel asked that a copy of Mr Ramalingam's report of the meeting be made available to those concerned.

The CLB is expected to pass orders on the request.

Among the 10 members elected to the board were Mr B. Ramachandra Adityan, the chairman of the Nadar Mahajana Bank Share Investor's Forum and his relatives.

Following the elections, there are now 14 members on the board, two of them nominated by the Reserve Bank of India and two by the Centre.

The ownership of the bank's shares has been a contentious issue ever since 67 per cent of its equity was sold by members of the Nadar community to those outside the community. The Nadar representatives have maintained that the ownership should be within their community for their general good.

The Nadar Mahajana Bank Share Investors Forum was floated to buy back the shares. With contributions from thousands of Nadars, the forum purchased over 34 per cent of the equity from Mr C. Sivasankaran of the Sterling Group. These were transferred to over 25,000 shareholders. For the balance 33 per cent, Mr Ramachandra Adityan entered into an agreement with Mr Sivasankaran to purchase the shares. The issue of transfer of these shares is pending before the RBI. But the votes on the strength of these shares were cast by proxies who held an irrevocable power of attorney given by the original shareholders who had sold the shares.

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