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M. Ramesh
R. Ravikumar

Chennai June 7 Foreign investors have picked up 46,862 shares of Tamilnad Mercantile Bank Ltd (TMB), which works out to 16.47 per cent of the paid-up equity of the bank, sources in the know told Business Line today.

Members of the Nadar community have also purchased another 48,556 shares of the bank, or 17.06 per cent.

Controversial sale

With this, all the 95,418 shares (33.58 per cent) of the bank that were with Mr C. Sivasankaran, Chairman of the Sterling group of companies, have been bought out. This effectively brings the curtain down on the controversial stake-sale that has been raging for 14 years now.

Senior sources in the bank said that the transactions have been approved by the Reserve Bank of India.

While the sources did not wish to reveal the names of the investors, it is understood that they include hedge funds and private equity funds from the US and Switzerland.

Sources in the banking industry said that Mr Ramesh Vangal, Chairman and founder of the Katra group; Mr Ravi Trehan and Mr Rajat Gupta, former Managing Director, McKinsey, are among the foreign investors.

The roots of the controversy go back more than 14 years, when 67 per cent of the bank's shares, promoted by members of the Nadar community for its welfare, were sold outside the community.

But the share transfer was not approved by the Reserve Bank.

The community members formed an organisation, the Nadar Mahajana Sangha Bank Share Investors Forum led by Mr Ramachandra Adityan, to retrieve the shares, which at that time were with Mr C. Sivasankaran of the Sterling Group.

Following protracted negotiations, 33.47 per cent of the shares were purchased with over 25,000 members paying about Rs 8,250 a share. Now, the remaining shares have also been bought back from Mr Sivasankaran.

Related Stories:
The twists and turns in TMB tale
Transfer of Sivasankaran's shares: TMB told to decide on `group'
TMB board election sparks factionalism, infighting
TMB issue: Pact signed for share transfer

More Stories on : Private Banks | Mergers & Acquisitions | Foreign Institutional Investors

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