Essar group gains control of Tamilnad Mercantile Bank (TMB) after split in Nadar community. Essar group sells 67 per cent stake in bank to Mr C. Sivasankaran's Sterling group. RBI does not acknowledge these transactions.

June 1999

Nadar Mahajana Bank Share Investors Forum and Mr Sivasankaran enter into a memorandum of understanding. The forum is to pay Rs 110 crore to Mr Sivasankaran for his stake in the bank.

December 2001

Mr Sivasankaran extends deadline for full payment to June 2002. Forum claims it has paid Rs 80 crore.

September 2002

The Company Law Board (CLB) directs bank to hold AGM by September 30. No AGM has been held for six years. This ruling is challenged in the Madras High Court, which rules that the AGM is to be held by December 31.

October 2002

Mr R. Natarajan, retired General Manager of Bharat Overseas Bank, appointed as Chairman and CEO of TMB.

April 2003

Central Government moves CLB to remove 10 directors and appoint majority government directors in public interest. CLB declines to pass interim orders.

May 2003

CLB gives government nominees veto powers after Central Government moves amendment to original petition seeking removal of 10 directors. Board's strength to go to 16 after appointment of three directors by the Government.

June 2003

Madras High Court stays veto powers of government nominees. HC passes orders that loans above Rs 10 lakh to be sanctioned by CLB.

August 2003

Reports of compromise between Nadars and Mr Sivasankaran. Mr Sivasankaran to retain 33.55 per cent, while Nadars are to restrict themselves to 33.74 per cent subject to RBI approval.

CLB asks TMB to go ahead with long delayed AGM by August 31. It appoints retired HC Judge, Mr S. Ramalingam, to preside as Chairman of all AGMs for the years 1996-97 to 2002-03. AGM scheduled for September 25.

September 2003

CLB sets October 10 as deadline for TMB to complete transfer of 96,000 shares (representing 33.55 per cent of the share capital of 2.8 lakh shares) to individual shareholders. Bank told not to convene AGM till the process is complete.

October 2003

CLB directs TMB to convene AGM on December 7.

RBI writes to Mr R. Natarajan, Chairman of Tamilnad Mercantile Bank (TMB) expressing concern on asset quality and asks the board to be informed and action taken report to be submitted.

November 27

Mr R. Natarajan, Chairman, is eased out of the board by Nadar directors and powers vested with two General Managers.

November 28

RBI reinstates Mr Natarajan as Chairman.

December 2003

CLB sets January 15 as new deadline for transfer of shares. AGM date to be fixed thereafter.

December 12

Kuzhithurai Principal District Munsif Court restrains Mr Natarajan from discharging his duties. The petition, accusing Mr Natarajan of violations of various provisions of Companies Act and Banking Regulation Act was filed by Tamilnad Mercantile Bank Shareholders Welfare Association.

December 18

Central Govt moves CLB again for superseding TMB board referring to grave and serious developments.

Madras High Court vacates interim order of the Kuzhithurai Munsif Court. All cases pertaining to bank in Madras High court clubbed together and to be heard by the Chief Justice.

December 19

CLB suspends board of TMB, appoints new panel following petition filed by Department of Company Affairs. Bank to be managed by four new directors alongwith Chairman Mr R. Natarajan.

Mr N.R. Krishnan and Mr N.R. Sridharan are Company Law board nominees and Mr B. Ramaniraj and Mr George John are RBI nominees on the panel.

No policy decision is to be taken by the new panel. Mr Natarajan to function under its control and superintendence.

December 24

Madras High Court restrains TMB management panel from giving effect to any decisions or resolutions that it may pass.

January 24, 2004

Madras High Court asks RBI to decide on transfer of TMB shares to Mr Sivasankaran by February 15. The CLB fixes March 12 as the date for the AGM.

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