R. Balaji

The 82nd annual general meeting of Tamilnad Mercantile Bank was held at Tuticorin on Friday under tight police security. The issue of ownership of about 33 per cent of the bank's shares remains a controversial issue with various factions of the shareholders seeking to exercise the rights over the shares. — R. Balaji

Tuticorin , Dec. 25

IMAGE building, brand building and professional management. These are among the prime concerns for Tamilnad Mercantile Bank that has been in the grip of an ownership battle for more than a decade now.

This quarrel, which has boiled down to who exercises rights over a 33 per cent share of the bank's equity, in the last few years has evolved into an internecine feud between members of the Nadar community. Members of the community claim rights over the bank since it was promoted by the community and for the community, they say.

This battle is being fought in the courts, in wall posters, in the media and at the venue of the AGM, where charges and counter charges are fired between different factions, each enthusiastically backed by their supporters.

The bank, which is targeting a business of about Rs 8,200 crore this year, conducted its 82nd AGM at Tuticorin on Friday, under close police guard, some of whom were in riot gear. Participants and vehicles were checked thoroughly before being allowed to enter the venue, where more police kept a close watch.

The Madras High Court appointed a district judge to act as an observer. Last March, AGMs for the period between 1996-97 and 2002-03 were conducted on the same day after protracted legal wrangles in court and the Company Law Board. The venue even then was witness to similar incidents of protests by a section of the shareholders.

All this, the bank's management fears is bound to have an adverse impact on its reputation. While the bank scores well on its performance with the parameters such as employee profitability, branch profitability and customer satisfaction, but the public perception of the bank is taking a beating, they say.

The Chairman and Chief Executive Officer, Mr S. Radhakrishnan, responding to a query from presspersons after the AGM, acknowledged that the ownership issue had to be tackled fast. The bank is planning to embark on a brand building exercise in the coming months, and will target improvements in governance and professionalism in management. It has to focus on issues such as transparency and objectivity, all connected with corporate governance.

Echoing similar sentiments, one of the directors of the bank acknowledged that the controversy is taking its toll, even if it has not manifested itself in the performance. "You will not see this happen at next year's AGM," he assured presspersons.

There are moves to settle the issue fast, he said.

The bank is planning to engage international consultants for marketing and image building, the director said. It is also looking at marketing insurance products and other potential areas of growth.

One of the consultants has made a presentation to the bank and more are being considered. The bank will finalise an agency fast, he said.

While the Nadar community members have a fierce sense of loyalty to the bank, the time is now ripe to make them realise the distinction between ownership and management, he said. Some shareholders feel that owning a significant chunk of the shares automatically entitles them to a position on the board. But the management has to be professionally driven, and the bank is targeting that, the director said.

Resolutions passed

The results to the polls to the posts of three directors were announced on Saturday.

Mr A. Narayanan and Mr V. Baskaran were re-elected and Mr N. Balasubramanian was elected to the board. "All other agenda items placed before the meeting were passed with overwhelming majority," a bank spokesman said.

Among the resolutions, the bank proposes to enter into corporate agency with life and general insurance companies to market insurance products, if required through a subsidiary.

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