Two decades ago, Ramesh Vangal fought hard to get Pepsi into India. He had his way. Today, Vangal and his associates own 25 percent in a bank controlled by Tamil Nadu’s close-knit, powerful Nadar community. They don’t want him. But he won’t walk away
With its briny sea breeze and a history of pearl-diving, the port town of Tuticorin near the southern tip of India hardly looks like a corporate battlefield.
Yet, over the last decade-and-a-half, takeover titans have been raiding the town, attempting to grab its crown jewel: Tamilnad Mercantile Bank (TMB). At the core of the strife is that unique Indian institution called caste.
White Knights
Over the years, the movement to retrieve TMB from the feared outsiders had thrown up its own Nadar leaders. In the vanguard, though not always shoulder-to-shoulder, were two brothers: Sivanthi Adityan, who runs the largest selling newspaper in Tamil Nadu, Daily Thanthi, and his older brother Ramachandra Adityan, who runs a less spectacularly successful newspaper business.
Sivanthi Adityan’s initial efforts fizzled out, Ramachandra Adityan continued to champion the cause for more than a decade. His detractors saw his dedication as cover for his desire to build a business empire to rival his younger brother’s; whatever his motives, Ramachandra Adityan’s next move started the third war for TMB.
Changing facades of Tamilnad Mercantile Bank over the years
1994 - Essar picks up 67% stake; Nadars protest
Capital: Rs. 28 lakh
Reserves: Rs. 38.7 crore
Business: Rs. 1,221 crore
EPS: Rs. 364.2
Share price: Rs. 3,000
1996 - Nadars unable to buy back shares; Essars sell them to C. Sivasankaran
Capital: Rs. 28 lakh
Reserves: Rs. 79.2 crore
Business: Rs. 1,813 crore
EPS: Rs. 845.5
Share price: Rs. 3,500
1998 - Sivasankaran agrees to sell back 51% to the Nadars, the balance to FIs for Rs. 155 crore
Capital: Rs. 28 lakh
Reserves: Rs.186 crore
Business: Rs. 3,027 crore
EPS: Rs. 1,232
Share price: Rs. 7,580
2003 - C. Sivasankaran
transfers 33.74% to the Nadars and transfers
the rest to custodians
Capital: Rs. 28 lakh
Reserves: Rs. 397 crore
Business: Rs. 6,045crore
EPS: Rs. 2,242
Share price: Rs. 8,440
2007 - Vangal and seven other investors buy a 25% stake
Capital: Rs. 28 lakh
Reserves: Rs. 759 crore
Business: Rs.10,067 crore
EPS: Rs. 3,718.70
Share price: Rs. 24,180
A Must Watch- The Outsider: A Video Story
(This story appears in the 03 July, 2009 issue of Forbes India. To visit our Archives, click here.)