SAT dismisses minority investors plea against TamilNad Mercantile Bank IPO
The bank had originally planned an OFS and fresh issue of shares when it had filed the DRHP in September 2021. However, subsequently, the bank scrapped its decision on the OFS. Investors had argued that the bank needs to file a fresh DRHP with Sebi
MUMBAI: The Securities Appellate Tribunal (SAT) on Friday dismissed appeals filed by minority shareholders of the Tamilnad Mercantile Bank against the lender's upcoming initial public offering (IPO). As a result, the offer will now go live, as scheduled, on 5 September.
A bench led by justice Tarun Agarawala said, “All appeals have been dismissed since they do not have any merit." A detailed order in the matter is awaited.
Three shareholders, Robert and Ardis James Co, East River Holdings Ltd, and Swiss Re Investors (Mauritius) Ltd had sought a stay on the public offer, citing concerns over the offer for sale (OFS) being scrapped and the Securities and Exchange Board of India’s (Sebi) decision making process in approving the public offer.
The bank had originally planned an OFS and fresh issue of shares when it had filed the draft red herring prospectus (DRHP) in September 2021. However, subsequently, the bank scrapped its decision on the OFS.
The investors had argued that the bank needs to file a fresh DRHP with Sebi. The markets regulator, however, did not find merit in the argument and did not ask the bank to file a fresh DRHP, allowing it to go ahead with its public issue. This led the three investors to file petitions before SAT to adjudicate if the bank can go ahead with its proposed listing.
Half a dozen foreign institutional investors together own 23.2% of the bank, according to the DRHP.
The OFS was scrapped because of a legal overhang on some of shares of the bank.
On Friday, the counsel appearing for the private lender had said nearly 37.73%, or 53.76 million shares of its equity shares, were under various legal and regulatory disputes. It is also being probed by the Reserve Bank of India and the Enforcement Directorate.
The private bank had missed the December 2021 deadline set by the Reserve Bank of India for the IPO, which then led to the bank being barred from expansion and curbs on its key management personnel, the counsel had said.
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