Tuticorin:

According to one director, the meeting was in conformity with a Company Law Board (CLB) order that the new board should meet and put on record the annual general meeting (AGM) held on 12.3.2003. Since this was just a formality, the agenda did not have any serious business.

"In the end, truth and justice will always win," said Aditan in a one-line comment on his election.

It was a long drawn fight for the Aditan group to gain total control of the bank. For years he has been spearheading the TMB retrieval movement, trying to bring back the 67 per cent of the bank stake to the Nadar community fold. Aditan was also a member of the dissolved TMB board. 

At the poll, the Aditan group secured around 1.33 lakh votes as against 45, 000 polled by his opponents. The bank has 2.84 lakh shares/votes. There were 44 contestants for the 10 board vacancies. Out of 51 nominations received initially, seven withdrew their nominations before the poll.

More than the poll and the results, what was keenly watched was the decision of the AGM chairman, S Ramalingam, a retired judge on the voting status of the 33 per cent stake. The Madras High Court had said that the voting status of the shares would be decided by the AGM chairman.

The question was who will exercise the voting rights - the original sellers or the seven Nadar individuals who bought the shares recently or the power of attorney (POA) holders of the original sellers and the buyers?

A short recap for better understanding of the POA holders. Way back in 1990s the three major sellers of TMB shares (See The seven year itch) and the four Essar Group companies executed a POA in favour of three individuals. According to the POA, the three individuals will hold the shares but the beneficial interest in the shares will rest with the Essar Group companies. Any one of them could execute a proxy.

Subsequently the Essar Group sold the four companies to the Sterling Group headed by C Sivasankaran, with the POA subsisting. Upon application to approve the transfer of shares in favour of the four companies - now part of the Sterling group- the Reserve Bank of India (RBI) refused permission. The Sterling group recently entered in a share sale agreement with seven Nadar individuals. 

The recent transaction (the original and the modified one) between the Sterling Group and the seven Nadar individuals were put under microscope by a committee appointed by the Madras High Court. 

The option to freeze the voting rights could not have gathered weight as the Madras High Court was clear in its decision. Had the High Court wanted to freeze the voting rights, it could have done so on its own.

Perhaps taking this into view, Ramalingam''s decision was in favour of the POA holders.

Argues a lawyer, "There are two parties to this dispute. One partly sold its stakes and received the consideration. But it refuses to part with the management. On the other side there is a party which has bought the shares, paid the consideration but is not able to gain the management. On the face of it, it is clear the equity is in favour of the latter."

However a person belonging to Aditan group does not agree with this theory. According to him, ultimately it is the community interest that is important. "The situation was similar when Essar and Sterling Group held the stakes."

Speculations aside, one of the POA holder gave the proxy forms in favour of couple of persons in the Aditan group. The proxy forms were duly lodged with the bank''s corporate office and proxies then voted at the AGM. And this seems to be reason for the massive winning margin for the group led by the press baron.

"We would have won the elections even without the said 33 per cent," says one of the directors.

According to P H Arvindh Pandian, the newly elected director and Aditan''s legal counsel, "The future of the bank is secure if it keeps the interests of the Nadar community with a professional approach in decision making."

Be that as it may, it is still not curtains for the TMB soap opera. The opposite parties are planning to take the case back to court in appeal.