TMB to offload 10% to part-pay Sivasankaran

Total dues at rs 130 crore for 33 per cent stake

Tamilnad Mercantile Bank (TMB) plans to offload 10 per cent of its stake by June end to part fund the Rs 130 cr payment due to C Sivasankaran, promoter of the Sterling Infotech group, for transferring his 33 per cent stake in the bank.

Addressing mediapersons on the sidelines of launching Siranjeevee, a recurring deposit scheme in Chennai, B Ramachandra Adityan, director, TMB, said, "There is a proposal to transfer 10 per cent stake of the 33 per cent stake to overseas and domestic private equity investors."

He declined to mention at what price the stake will be sold as negotiations were on.

Sivasankaran signed the sale deed of transferring the remaining 33 per cent of the 67 per cent to the Nadar community for a value of Rs 130 crore on February 16, 2004. The Sterling Infotech group had extended the deadline for payment of cash till December 2004.

On whether Sivasankaran had given a new deadline for the payment of the Rs 130 crore, Adityan said there was no such issue involved.

He said that the Reserve Bank of India 'was not happy' with the seven investors with whom the power of attorney for the 33 per cent stake rested. The central bank wanted further dilution of the stake holding, he added.

Adityan, also the chairman of the Nadar Mahajana Bank Investors Forum (NMBIF) had spearheaded the community's efforts to get back the 67 per cent stake of the bank.

In 1994, three promoters of TMB sold 67 per cent stake to the Essar group. The controversy started with the central bank not approving the share transfer to Essar group.

Later, Essar transferred the 67 per cent stake to Sterling group as a part-payment for acquisition of the cellular licence for Delhi circle.

Owing to the pressure from the Nadar community, Sivasakaran agreed to sell the 67 per cent shares for Rs 155 crore. The NMBIF paid only Rs 81 crore and managed to transfer only 34 per cent stake to 25,000 shareholders of the community.

The transfer of the balance 33 per cent continued to remain a debate for a long time till last year when Sivasankaran agreed to transfer it for Rs 133 crore.