| What this means is the share transfer will now require the approval of the Reserve Bank of India (RBI), and voting rights of the contentious 33 per cent will not get fully exercised at the first annual general meeting of the bank in seven years, to be held on 12 March. |
| Last week, the Nadar Mahajana Sangam moved the high court and obtained a stay on the exit deal signed by the Sterling group on 16 February before the deputy prime minister L K Advani. |
| The accord, which was brokered by the convenor of Swadeshi Jagran Manch, S Gururmurthy, facilitated the transfer of Sivasankaran's 33 per cent stake in TMB to the seven investors, who had anchored the Nadar Mahajana Bank Share Investors' Forum. |
| In response, Adityan moved the court's division bench and got a suspension of the stay order. The bank's board of directors was directed to work out if the seven investors in any way constituted "a group". |
| The Nadar Mahajan Sangam next filed an appeal before the same bench for revoking the suspension order. |
| At the hearing on 9 March, the board of directors reported they did not find anything to classify the seven investors as a group, the transfer deeds to be in order and each of their holding pursuant to the share transfer to be less than ceiling of five per cent. |
| The board also observed that the seven investors and their four vendors had not secured RBI's acknowledgment but were trying to exercise influence on the operations of the bank. |
| In the light of this, the bench has ordered, "The transfer in favour of these seven persons has been effected and cannot be effected until such time the board receive a communication from RBI pursuant to the reference now made". |
| The bench has also restrained the seven investors from exercising their voting rights on this 33 per cent. Instead the voting rights can be exercised by the original holders of the shares. |
| The time for filing proxy by the original holders of these contentious shares has been extended to 24 hours before the AGM as a special consideration. |
| The bench has also taken into consideration concerns about efforts to put a spanner in the smooth conduct of the AGM, has pre-empted such a possibility absolving the bank, its directors, chairman and shareholders from heeding any order issued by any of the courts in Tamil Nadu. |
| These developments have certainly clouded hopes that the final curtain would be drawn on the 10-year old struggle by Tamil Nadu's Nadar community to resolve the issue of wresting complete control of the bank. True, Sivasankaran seems to have finally made his exit on paper. |
| But there is still that final transfer on a consideration of Rs 130 crore to be executed, the deadline for which has been set as December 2004. |
| The Nadars who stood the chance of regaining control of the bank for just Rs 56 crore, had they managed to cough up money in response to the first settlement with the Essar group, are definitely not savouring the thought of having to spend Rs 211 crore at end of the saga. |
| Where the seven investors are going to find the Rs 130 crore is left to speculation. The Nadar Mahajana Sangam would rather that Sivasankaran is paid only the Rs 155 crore he had earlier agreed to for the full 67 per cent stake. |
| But then he has already been able to wrest Rs 81 crore for the first lot of 34 per cent stake that he transferred over time. |
| All eyes are now the AGM that will elect a new of board of directors, on 12 March. There are 50 persons contesting for the available 10 vacancies. |
| The squabbling factions of the Nadar community has been engaging in frenetic proxy rallying by various factions on the eve of the meeting. |
| "We are estimating about 7000 participants at the meeting, though a clearer picture will emerge after the filed proxies are vetted", TMB officials told Business Standard. |
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