26 July 2024
The bank has filed for its proposed IPO in which incoming shareholders will not be able to approve accounts, vote on declaration of dividend, hold the management and board accountable through their vote or take any decision, because the company is unable to hold an AGM without a court sign-off, it pointed out in a note.
IiAS said according to the DRHP, the bank does not have the ability to convene a shareholder meeting without the consent of the Madras High Court. “This, as the draft document states, limits (the bank’s) ability to obtain approval of (its) shareholders in a timely manner, or at all. This is the first risk factor.” it said. The bank has been unable to hold an AGM either in 2020 or in 2021 and was not in a position to have the appointment of four of its directors regularised, obtain shareholder approval for amending its articles of association or its last two years accounts approved, owing to litigations arising out of share-transfer disputes
Institutional Investor Advisory Services (IiAS), a proxy firm that provides voting recommendations on shareholder resolutions of listed companies, has come down heavily on the proposed IPO of private sector lender Tamilnad Mercantile Bank (TMB), asking Sebi that the IPO should be permitted only after legal tangles are resolved.