CHENNAI, APRIL 18: With the board of Tuticorin-based Tamilnad Mercantile Bank (TMB) casting aside its own earlier order allowing transfer of shares acquired by seven firms, the stage appears set for a fresh round of legal war. More than anything else, the Thursday's decision of the board has brought the Ruias back on the centre-stage of the unfolding TMB saga.The Ruias have been insisting that they have long vacated the TMB field and that the Nadar community should resolve the issue with non-resident Indian C Sivasankaran. They reasoned that they have `sold' the seven satellite outfits through which they acquired TMB shares to Sivasankaran. These companies were `handed over' to Sivasankaran in lieu of payment due to him for acquisition of satellite firms, which controlled Sterling Computers which, in turn, held a cellular licence.The deal with Sivasankaran had twin objectives. For one, it enabled them to `extricate' themselves from the TMB mess. For another, they thought that by doing so, they could letNRI Sivasankaran acquire TMB. Their calculation was that the apex was against the Essar group only. If the ownership of the seven firms change, they reasoned, RBI would not have any objection to letting Sivasankaran, who does not have any exposure with the banking sector and who is not running a large industrial house, in. Both Sivasankaran and the Ruias were hoping that since the TMB board had already approved the share transfer in the name of these seven companies, the apex bank could be convinced to give its in principle acknowledgement for the share transfer in the changed set-up. But yesterday's action of the TMB board appears to have thrown a spanner into Ruias' work. Even if the board has not bothered to stay in step with the RBI stand vis-a-vis Essar shares, Ruias entry into TMB would have remained blocked. For, the apex bank clearly taken a position long ago to stop their march into TMB. If so, why did the `new look' TMB board, filled mainly of men sympathetic to bank retrieval cause, rescind itsearlier order now? The reasons are obvious. For one, it sends out a message at large that the board has come under the fold of the community people. For another, it is aimed at piercing the defence raised by the Ruias.By refusing now to transfer the shares in the name of seven firms, the TMB board is obviously trying to kill two birds with one stone. Firstly, the refusal means that it is not willing to recognise the claims of these seven firms, originally owned by Essar group, for ownership of the shares. If they are not the owners, they obviously can't sell these shares to anybody. This makes the sale of these seven satellite firms to Sivasankaran inconsequential as for as the bank board is concerned.Secondly, the board move is intended to puncture the claim made by the Ruias that they are not the owners of the seven firms since these were already sold to Sivasankaran. By changing the ownership of the seven firms, they sought to convince RBI that its earlier aversion should not come in the way oftaking a fresh look at the whole issue in the context of a changed management. The TMB board action will now mean that the new owner of these seven firms Sivasankaran will have to start afresh the whole process. Sivasankaran can't go to RBI now and has to come to the bank board seeking to register the shares.A former chairman of TMB termed the board action ``unusual and rare''. The fact of the matter is that the bank share retrieval committee has managed to gain control of the TMB board. Ruias will be ruing their dalliance with TMB.
