The Bombay High Court on Monday deferred a hearing in the dispute between Yes Bank and Madhu Kapur, wife of late Ashok Kapur who was the co-founder of Yes Bank along with MD & CEO Rana Kapoor.
The board of Yes Bank had rejected Shagun Gogia’s (daughter of Ashok and Madhu Kapur) nomination to its board on Thursday. The bank had then informed the Kapur family of the decision on Saturday. Later on Monday morning, Yes Bank submitted an affidavit, countering allegations made by Kapur in her motion against the bank.
?The present suit is not maintainable either in law or on the facts of the case…the present suit is infructuous, aside from being untenable,? the affidavit filed by Yes Bank says. A copy of the affidavit has been reviewed by FE. The affidavit then goes on to say that since ?Yes Bank is a banking company governed by the provisions of the Banking Regulation Act, 1949 and the Companies Act, 1956, the case does not lie.?
Since the appointment of three new directors was approved by a majority of the shareholders at the bank’s annual general meeting conducted on June 8, the suit cannot be maintained, the affidavit said.
Later in court, Kapur’s counsel asked for more time to review the affidavit and make amendments to their motion. Despite a request for Yes Bank counsel to dispose of the case immediately, the court decided to defer its decision to Friday.
The dispute arose when Yes Bank nominated three additional directors ? Diwan Arun Nanda, Ravish Chopra and MR Srinivasan ? to the board of the bank. Challenging the nomination, Madhu Kapur, wife of late Ashok Kapur and mother of Shagun Gogia, had filed a case, saying they had not been consulted on the nomination. Subsequently, Shagun Gogia filed her papers for a nomination to the board for the second time since 2009.
Rana Kapoor, CEO & MD of Yes Bank, holds 13.7% stake in Yes Bank while Madhu Kapur and her family hold close to 12%, which was inherited from the late Ashok Kapur, co-founder of the bank.
Sources close to the bank have suggested that Gogia was not considered appropriate for a board seat keeping in mind the past and present composition of the board. The decision was taken unanimously by the board, say sources. The Kapur family, confirming the receipt of the letter from Yes Bank, indicated that they will decide on further action only after the Bombay High Court’s decision. The family’s main interest is to secure joint nomination rights in keeping with their shareholding, said sources.
Even as this controversy continues, the bank elevated three of its executives as wholetime directors to the board. In its board meet on Thursday, the bank announced that Rajat Monga, Sanjay Palve and Pralay Mondal will be elevated to the position of wholetime directors. The decision will take effect upon approval of RBI and will be subject to shareholder approval, the bank had stated.