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Tamilnad Mercantile Bank’s proposal to appoint highest paid director as non-executive chairman rejected — Street cautious

Tamilnad Mercantile Bank’s proposal to appoint highest paid director as non-executive chairman rejected — Street cautious

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By Abhishek Kothari  Sept 21, 2022 10:54:27 AM IST (Updated)

Tamilnad Mercantile Bank's shares gave up initial losses to rise over 2 percent in intraday trade, a day after the lender said Reserve Bank of India (RBI) has rejected its proposal to appoint B Vijayadurai as part-time non-executive chairman.

Shares of Tamilnad Mercantile Bank declined on Wednesday Street continued to be cautious a day after the lender said the Reserve Bank of India (RBI) has rejected its proposal to appoint B Vijayadurai as part-time non-executive chairman.

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Tamilnad Mercantile Bank's shares gave up initial losses to rise over 2 percent in intraday trade. The stock was up 0.4 percent from the previous close at Rs 496.10 at 10:12 am. The stock has slipped 2.26 percent since its listing on September 15.
Today’s share price movement follows the central bank’s refusal to appoint B Vijayadurai as part-time non-executive chairman of the lender, as per a regulatory filing. The bank had, on August 20, suggested to the RBI the appointment of Vijayadurai.
The bank said the regulator had advised it to submit a fresh proposal of another independent director for the post of part-time non-executive chairman.
Vijayadurai has been a director and former vice president at Tamilnad Mercantile Bank and is the highest-paid director on the lender’s board.
Vijayadurai was engaged in an issue with the Enforcement Directorate (ED) and a few other key persons related to bonus shares in May 2016 and had sought an extension.
Earlier in August this year, ED sent a letter to initiate an inquiry for alleged violations of the Foreign Exchange Management Act (FEMA).
Tamilnad Mercantile Bank last week made a tepid debut on Dalal Street in contrast to the trend seen in the grey market. The lender’s stock began trading on BSE at Rs 510, as against its IPO price range of Rs 500-525.
Even as the stock is starting to recover and is trading in the green, even at the day’s high of Rs 504.85, it’s still below the listing price on BSE.
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