Tamilnad Mercantile Plans To Increase Capital To Rs 10 Crore

The subscribed capital now is Rs 28 lakh, while the reserves are close to Rs 80 crore. The bank management will hike the capital base through either a rights issue or a bonus issue, TMB sources said.

Meanwhile, in the battle for control over the bank, the Nadar community has finally come to accept its takeover by the Essar group. There is no other option, a board member said, especially after the Company Law Board ruled that the share transfer matter of TMB need not be approved at the AGM.

The share transfer now needs only the approval of the Reserve Bank, as it involves change in management and more than 10 per cent stake. With this, all moves by the Nadar community to buy back the shares from Essar comes to zilch and the chances of any such arrangement before the AGM are remote, a prominent member of the community told Business Standard from Tuticorin.

 

The only hitch for Essar now is the issue of four directors from the Nadar community, who will be on the bank board. As per the agreement the Essar group has arrived at with Tuticorin Spinning Mills promoters, these four directors will be nominated from the existing eight representatives of the Nadar community, six of whom are supporters of the spinning mill. Other minority shareholders and community leaders do not agree with this proviso as they feel that Tuticorin Spinning Mill promoters will take undue advantage of the situation and continue to dominate the board, as they have done so far.

Although representations have been made to the Essar management by the community members, the company has expressed helplessness.

To overcome the rather ticklish problem, some Nadar representatives are seeking the good offices of Tamil Nadu chief minister M Karunanidhi to resolve the issue.

Sources say a three-member delegation, led by Sivakasi MLA Chokan, has already met the chief minister twice.