A member of the board told PTI today that the board also proposed to take recourse to intercorporate lending to help the backward `Nadar' community wrest back 67 per cent stake in the bank from NRI industrialist C Sivasankaran. With a view to utilising the new buyback and intercorporate loan norms to the advantage of Nadars, the bank had applied to the Over-the-Counter Exchange of India (OTCEI) for listing and planned a public issue, once Sivasankaran was willing to part with his stake, he said.

The dates for the AGMs would be announced soon, subject to the Madras High Court decision on a review petition aimed at freezing the voting rights of the disputed shares, the director said.

While approval for buyback of up to 25 per cent equity would besought through an enabling resolution, the board also proposed an alternative route, under which a new company would be promoted to purchase Sivasankaran's stake with funds lent to it by the bank as intercorporate loan.

Pointing out that the new norms allowed intercorporate loans and investments by a corporate for up to 60 % of its paid-up capital plus reserves, the director said the TMB's latest moves were aimed at ensuring that resources were not a constraint for Nadars to gain back control of the bank. The board would soon approach the three Nadar business groups, who originally sold off the shares to Essars, and seek a letter from them favouring buyback.

Their sale contract had specified that the deal with the Essar group was subject to RBI permission and it would be legally tenable for them to demand the shares back as RBI had denied permission to the Essar group to take over the bank, he said.