YES Bank wanted to remove Kapur as promoter: Counsel

On Day One of the final hearing of the ongoing court case between YES Bank and Madhu Kapur, the latter's counsel said the lender tried to de-classify her as promoter of the bank, citing communications between the bank and the Reserve Bank of India (RBI).

Kapur's counsel presented copies of the correspondence between the two institutions during 2010-13 to challenge the promoter status of Kapur, the second largest shareholder.

The counsel said RBI, in a reply to Rana Kapoor, managing director and chief executive officer of YES Bank, in January 2013, had said the regulator would agree to change Kapur's promoter status if two conditions were met. The first condition was that Kapur's shareholding should be brought down to less than five per cent before March 31, 2014; and Kapoor should also bring down his shareholding to less than 10 per cent in the same time period.

However, Kapoor said this condition had not been met. Currently, Kapoor, the largest shareholder in the bank, has 11.86 per cent stake, whereas Kapur and her company owns 10.36 per cent.

Earlier, the Bombay High Court had directed YES Bank to hand over all the documents pertaining to the bank's communication with RBI and the Securities and Exchange Board of India (Sebi) on challenging Kapur's promoter status to her counsel.

Kapur had moved court, claiming her right as the bank's co-promoter was violated and she wasn't consulted before the bank had appointed directors on its board. Kapur's daughter, Shagun Kapur Gogia, had also applied to be a member of the bank's board, in June 2013, but the board had rejected her nomination on the basis that she lacked sufficient experience.

Meanwhile, YES Bank has also appealed to the Supreme Court to stay the proceedings in the Bombay High Court, which was rejected. But the Supreme Court has accepted the plea and has scheduled a hearing in January 2015.

A YES Bank spokesperson said, "As the matter is sub judice, as a responsible media house you may like to refrain from reporting any one-sided news item which may cause prejudice in the minds of the reader including the honourable Bombay HC…we urge you not to publish, broadcast or disseminate any news item pertaining to the court case which is likely to be one-sided and unbalanced…if in spite of our clarification you choose to publish one-sided articles or news items you may create bias, malice and prejudice and act as a broadcast mechanism to the unfortunate defamatory exercise undertaken by the plaintiffs…we would also like to reiterate that any unverified reporting would be at your own risk and responsibility."