The Madras high court has granted an ad interim injunction to the Nadar Mahajana Sangam, the apex body representing the Nadars, restraining non-resident Indian investor C Sivasankaran from selling his 33 per cent stake in Tamilnad Mercantile Bank to a group of seven individual investors from the Nadar community.
Laying claim to Sivasankaran's 33 per cent stake in the bank, the writ petition challenging the sale was filed by Nadar Mahajana Sangam general secretary G Karikolraj.
Karikolraj has prayed in the petition that the court should restrain the Tamilnad Mercantile Bank board from recognising the transfer of shares by Sivasankaran to the seven-member group led by Ramachandra Adityan.
The petition cited the Company Law Board order dated December 18, 2003, which said the bank's committee of directors would not take any policy decision with regard to its management.
It further pointed out that the Madras High Court, in its order dated December 31, 2003, had said the committee could only decide on day-to-day matters on the running of the bank.
According to observers, the transfer of 95,418 shares, representing a 33 per cent stake in the bank, is a major policy decision and does not pertain to the day-to-day running of the bank.
It, therefore, fell outside the purview of the committee of directors, they added.
On February 16, 2004, Sivasankaran agreed to divest his 33 per cent holding in the Tuticorin-based bank to a group of seven individual Nadar investors for Rs 130 crore (Rs 1.3 billion). The deal was mediated by Chennai-based chartered accountant S Gurumurthy.