Yes Bank promoter not for extension of CEO Rana Kapoor
CONFLICT OF INTEREST Respect RBI views, expedite the process of finding successor to CEO: Madhu Kapur to board
MUMBAI: Yes Bank Ltd’s decision to request the regulator to extend managing director Rana Kapoor’s tenure is not in the best interests of the lender, Madhu Kapur, widow of co-founder Ashok Kapur and the bank’s second largest shareholder, wrote to the board.
In the September 28 letter to the Yes Bank board, Kapur suggested that the board expedite the process of finding a successor to Kapoor so that the bank does not suffer any long-term setback.
“The decisions that the board appears to have taken are not, in my view, in the best interests of the bank as a public trust financial institution,” Kapur said.
the contents of the letter.
On September 25, the board of Yes Bank had said it would ask the Reserve Bank of India (RBI) to extend managing director and chief executive Rana Kapoor’s tenure by eight months. The board decided it would first seek an extension for Kapoor till April 30 for finalization of financial statements for the year to March 31, and thereafter a further extension till September 30 for completing the annual general meeting process.
The bank’s board decided on the course of action after RBI agreed to extend Kapoor’s tenure till January 31, 2019 in response to the bank’s request for a threeyear extension till August 31, 2021. Yes Bank shares have fallen 18.65% in September because of the uncertainty related to Kapoor’s reappointment.
An email sent to Yes Bank did not elicit any response till press time. Madhu Kapur Rana Kapoor* Yes Capital (India) Morgan Credits Mags Finvest
Madhu Kapur urged the Yes Bank board to appoint a credible agency to look for CEO and MD Rana Kapoor’s successor
She has asked the board to Kapur said the appointment of not take any action contrary to Rajat Monga and Pralay Mondal RBI’S directive on Kapoor’s as whole-time directors had tenure and the Bombay high been struck down earlier by court ruling on directors the Bombay HC
Madhu Kapur wrote that Yes Bank should respect the views of RBI as the banking regulator and take appropriate steps at the earliest to identify a person as Rana Kapoor’s successor, “who is credible, of special caliber, with unimpeachable integrity”, under whose leadership the bank will reach greater heights.
The board at its September 25 meeting decided to set up a search committee to identify a successor to Kapoor. The committee will include three existing nomination and remuneration committee board members, along with two external experts. The board also decided to promote Rajat Monga and Pralay Mondal as executive directors, subject to approval from RBI.
Citing a June 4, 2015 Bombay high court judgement, Kapur said in her letter that even the appointment of Monga and Mondal as whole-time directors had been struck down earlier by the court. She added that these ear- (in %)
lier appointments were done without consultation with the co-founders.
Kapur has also requested the board to not take any action contrary to the RBI directive and the judgement of the Bombay high court, so that the “challenging situation presently faced by the bank is redressed without suffering any longtime setback to the bank and its stakeholders”.
She further wrote that as one of the largest shareholders, the co-founders wish to act constructively in the best interest of the bank and are willing to take steps to protect and further the interest of the bank and all its stakeholders.on September 28, Rana Kapoor tweeted that his shares in the bank are akin to diamonds and vowed not to sell them to cut his or his family’s promoter holding in the bank. This was preceded by a report in
Madhu Kapur had sold 0.04% of her stake on September 21.