MUMBAI: The Securities Appellate Tribunal (SAT) on Friday dismissed an appeal filed by minority shareholders of Tamil Nadu Mercantile Bank against the lender’s upcoming initial public offering (IPO). As a result, the offer will now go live as scheduled on September 5.
“All the appeals have been dismissed as there is no merit in them,” a bench headed by Justice Tarun Agarwal said. A detailed order in the matter is awaited.
The three shareholders, Robert and Ardis Gems Company, East River Holdings Ltd and Swiss Re Investors (Mauritius) Ltd, have called for scrapping of Offer for Sale (OFS) and a stay on the public offering citing concerns over the Securities and Exchange Board of India. had demanded. India’s (SEBI) decision-making process in approving a public offering.
The bank had originally planned an OFS and fresh issue of shares after the filing of the draft Red Herring Prospectus (DRHP) in September 2021. However, later, the bank reversed its decision on the OFS.
The investors argued that the bank needs to file a fresh DRHP with SEBI. However, the market regulator did not hold back and did not ask the bank to file a fresh DRHP, so that it could go ahead with its public issue. This prompted the three investors to petition the SAT to see if the bank can go ahead with its proposed listing.
According to the DRHP, half a dozen foreign institutional investors together own 23.2 per cent of the bank.
The OFS was terminated due to a legal overhang on certain shares of the bank.
On Friday, the private lender’s counsel had said that around 37.73%, or 53.76 million shares of its equity shares, were under various legal and regulatory disputes. It is also being investigated by the Reserve Bank of India and the Enforcement Directorate.
The counsel had said that the private bank had missed the December 2021 deadline set by the Reserve Bank of India for the IPO, due to which the bank was barred from extension and restrictions on its key management personnel.
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