Madhu Kapur might challenge board appointment of 3 executive directors

Court to hear YES Bank case on Friday

Madhu Kapur, widow of YES Bank co-founder Ashok Kapur, is likely to challenge the appointment of three executive directors — Rajat Monga, Sanjay Palve and Pralay Mondal — on the bank’s board.

People familiar with the development said the Kapur family is also likely to contest the way the bank conducted its annual shareholders’ meet earlier this month, in which a majority approved the appointment of three directors — Diwan Arun Nanda, Ravish Chopra and M R Srinivasan — on the board. Chopra and Srinivasan were appointed as non-independent directors, as they were recommended by Rana Kapoor, co-founder, managing director and chief executive officer of YES Bank.

“There will be amendments in the suit (filed by the Kapur family against the bank) covering the events that have happened after June 6. The appointment of the three executive directors and the conduct of the annual general meeting (AGM) is likely to be challenged,” said a source.

Madhu and her two children (Shagun Kapur Gogia and Gaurav Kapur) had moved the high court here on June 6, alleging their rights as a co-promoter were violated.

The Kapur family had sought a stay on the AGM and challenged the proposed appointment of the three directors, as they were not consulted as co-promoters.

While the court had refused to grant a stay on the AGM, it directed the bank to advance its board meeting by almost a month to June 27 and consider Gogia’s induction.

In the board meeting last Thursday, the directors unanimously agreed not to induct Gogia. They also decided to appoint three of the bank's top management executives as executive directors on the board, to reinforce the professional character of YES Bank.

Sources indicate the Kapur family will not challenge the bank's decision to reject Gogia on its board. “The issue here is not whether Shagun is appointed or not. The issue is the Kapur family’s right as co-promoter has been violated and it must be restored,” said the source.