At AGM, Kapur questions YES Bank governance

Bank says her intent mala fide; resolutions likely to be passed, but will be challenged in court

The resolution on re-appointing Rana Kapoor as managing director and chief executive officer (MD & CEO) of YES Bank, along with the appointment of other directors, for which voting was conducted at the bank’s annual general meeting (AGM) on Saturday, is likely to see smooth passage.

At the AGM, Madhu Kapur, widow of YES Bank co-founder Ashok Kapur, made an emotional address to shareholders on how she had been treated shabbily by the management, a charge dismissed by the bank.

Kapur is likely to file a revised petition against the appointments next week.

At the AGM, several proposals, including on the adoption of a financial statement for FY14 and approval of dividend, came up for shareholder approval. Resolutions pertaining to financial aspects and those related to the appointment of independent directors and the re-appointment of Rana Kapoor as MD & CEO with a revised remuneration have to be passed by voting. The results of the voting by shareholders are likely to be announced on Monday.

Early last year, 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 a few directors on its board.

In May this year, Kapur moved the high court here, challenging YES Bank’s proposal to re-appoint Rana Kapoor as MD & CEO, Srinivasan as chairman and Ravish Chopra as independent director. Shagun Kapur Gogia, Madhu Kapur’s daughter, said her faction would continue to challenge the appointment of directors.

In her address at the AGM, Madhu Kapur said she was fighting for the rights she had inherited from her late husband (Ashok Kapur), which had been denied to her. These rights, she said, were enshrined in the Articles of Association and approved by the Reserve Bank of India. “If we want our bank to be sustainable, it will have to be trustworthy at all levels, with corporate governance and transparency being truly observed at all times,” she said in her address. “In the end, I can say confidently Rana, my husband Ashok would not have treated your wife Bindu in the manner in which you have treated me,” she added.

Madhu Kapur and Bindu, Rana Kapoor’s wife, are sisters.

Non-executive chairman M R Srinivasan said, “The second-largest shareholder who has raised some issues about governance has recommended the approval of resolutions pertaining to the finalisation of the books of accounts, and for payment of dividend, which is an all-time high of 80 per cent and the highest among any peer banks in their 10th years. The said shareholder has not challenged this. Under these circumstances, the intent behind such allegations is clearly mala fide, and to pursue vested interest.”

He added this was despite the fact that the Bombay High Court had already rejected an application for the grant of ad-interim relief against passing resolutions at the ensuing AGM, as sought by Kapur. Srinivasan said the bank’s board “has always acted in a manner which is in accordance with law and has upheld the principles of corporate and management governance”.

The court had said the appointments would be subject to its final ruling on the matter.