Rejecting Shagun as Yes Bank director was unfair, HC told

Written by Press Trust of India | Mumbai | Updated: Aug 14 2013, 04:58am hrs
YES Bank
The lawyer of the widow of former Yes Bank director Ashok Kapur on Tuesday argued in the Bombay High Court that her brother-in-law Rana Kapoor, co-founder of the bank, never wanted her daughter Shagun Gogia to be nominated as a director of the private lender.

Justice SJ Kathawala was hearing a suit filed by Kapurs widow Madhu and Shagun, challenging the rejection of the latters nomination by the banks board of directors.

That is why extra conditions were prescribed to accept her (Shagun) nomination while other directors, whose nominations were considered, were not required to undergo such conditions," said Madhus counsel Darius Khambata.

The intention of imposing extra conditions was to reject her nomination. Hence, different bogies were raised like she did not have the qualification or did not fit into the profile of a director, Khambata submitted.

The senior counsel referred to correspondence between the banks higher ups and Shagun, asking her to cooperate or else her nomination would not be considered. She was also told in a subtle tone that if she moved the court then her nomination would be dropped, Khambata argued.

Shagun was duly qualified for the post of director and rejecting her nomination was not fair and proper", he said.

Ashok and Rana had founded Yes Bank and being Indian partners had a joint power to nominate a director. After Ashok passed away, this right was vested in Rana and he should honour the decision taken by both earlier in this regard, Madhus lawyer argued.

He said Rana had initially concurred to accept Shaguns nomination as a director but later took a different stand, saying her candidature would not be supported by the banks board as she had moved the court.

Ashok died in 26/11 Mumbai terror attacks. His wife Madhu and two children (Shagun and son Gaurav Kapur) together hold 12% interest in the bank, while Rana, who founded the bank with Ashok in 2003, holds 13.7%.

Madhus sister Bina is married to Rana. Arguments on the suit would continue on Wednesday.