HC restrains TMB's management panel

The Madras High Court passed an order preventing the newly constituted management committee of the Tamilnad Mercantile Bank from giving any effect to any resolutions that they may pass at their board meetings.

The bank is at present managed by two Company Law Board (CLB) nominees and two RBI nominees along with the chairman of the bank R Natarajan.

The two CLB nominees are N R Krishnan and N R Sridharan. The two RBI nominees are B Ramaniraj and George John.

It was only on December 19 that the additional principal bench of the Company Law Board (CLB), Chennai, had in an order suspended the board of directors of the bank. The CLB order had come in the wake of a petition filed by the department of company affairs.

The Madras High Court was acting on a petition filed by independent director of the suspended TMB board P Natarajan.

While the order does not prevent the management committee of the bank from meeting and adopting resolutions, it restrains them from acting on them.

The DCA had in its petition to the CLB felt, that the recent controversy the bank which pitted section of the directors of the bank against the bank's chairman would lead to loss of depositors confidence in the bank.

The DCA petition also said that unnecessary personal issues between various parties could bring the bank to a stage of insolvency.