Mumbai:Yes Bank’s main promoters took another step earlier this week toward bridging the differences between themselves when an executive considered close to CEO Rana Kapoor met Shagun Gogia, daughter of copromoter Madhu Kapur, to share balance sheet details and get the latter up to date with the lender’s financials, two people familiar with the development said.
This meeting on Tuesday was a follow-up to an earlier weekend conference that involved the presence of the three sisters, Madhu Kapur, Bindu Kapoor, and Neeru Puri. Bindu Kapoor is the wife of Rana Kapoor. Madhu Kapur is the wife of late Yes Bank co-founder Ashok Kapur. Madhu Kapur has been locked in a legal battle with the Yes Bank CEO for the right to nominate directors to the bank’s board.
“There was a plan shared by the Rana Kapoor group, which included an equal right for both the promoters to nominate three whole-time directors on the bank’s board and also agree on a common chairman and CEO,” said one of the persons cited above. “The proposal also includes correcting the information disparity about the bank’s promoters by having senior management and the board meet the Madhu Kapur group to ensure both the promoter groups are on the same footing.”
To be sure, no concrete agreement has been made so far and Yes Bank CEO, whose nod is crucial for a settlement, has not met members of the rival camp to date.
“There is an informal proposal shared. But ultimately the court order of 2015 will form the base for any settlement. It is early days and we have asked for more clarity from the Rana Kapoor camp,” said a person looking after Madhu Kapur’s interests.
In June 2015, the Bombay High Court recognised Madhu Kapur and her children Shagun Kapur Gogia and Gaurav Kapur as successors of late co-founder Ashok Kapur, giving them the right to nominate directors. However, Yes Bank and Rana Kapoor have challenged the ruling in front of a twojudge bench.
Shagun Gogia did not reply to an email seeking comment. A Yes Bank spokesperson also did not respond.
On Wednesday the bank announced that its search committee had hired the US-based Korn Ferry to help in finding a new CEO.
The Madhu Kapur camp has maintained that its right to nominate directors on the bank’s board should be the starting point for any negotiation. The fact that a senior bank executive has reached out to the opposite camp is an indication that Kapoor might be willing to agree, said the person from the Madhu Kapur group cited above.
“The fact is that the articles of association of the bank say that the CEO has to be jointly nominated by both promoters. With Kapoor’s exit, he will need our help to ensure an agreeable person takes the post,” said this person from the Madhu Kapur camp.
The sharp fall in Yes Bank’s stock may also force a rapprochement. The bank’s shares are off their recent peak of Rs 393, and are currently trading at Rs 240 apiece, up from the end-September low of Rs 183.
The Rana Kapoor group owns 10.7 per cent, while the Madhu Kapur group owns 9.3 per cent stake in the bank.
Source: Economic Times