HC to hear Kapur's petition on YES Bank board seat today

The Bombay High Court will on Monday take up a petition filed by Madhu Kapur seeking a direction to the YES Bank board to induct her daughter, Shagun Kapur Gogia, as a nominee director.

Kapur is the wife of YES Bank's co-founder Ashok Kapur, who was killed in the November 2008 terrorist attack on the city. Gogia had been nominated by her mother as the legal heir to Kapur's 12 per cent stake in the bank.

Ashok Kapur had co-founded YES Bank with Rana Kapoor, who is married to Madhu's sister. The tussle between the promoter families is over a board seat in the bank.

Rana Kapoor, who owns 13.7 per cent in the bank, is its managing director and chief executive. On June 6, Madhu moved the HC seeking to quash the appointment of three directors (Diwan Arun Nanda, Ravish Chopra and M R Srinivasan) on its board as well as to stall the annual general meeting slated for June 8.

Judge S J Kathawala had advised the warring families to resolve the dispute in an amicable manner, but did not stop the AGM. The court asked the board to advance its July 22 meeting to June 27 and consider Madhu's request for making her daughter Shagun an nominee director.

Accordingly the bank held its board meeting on Thursday. After the board meeting, the bank had issued a statement saying it would inform the HC about the outcome of the board.

However, a letter addressed to Madhu by the board said: "The board of directors has unanimously agreed that the recommendation of Shagun Gogia made by you should not be accepted." The letter also said Rana Kapoor recused himself from the deliberations surrounding this issue both at the nominations and governance committee meetings and then at the overall board level meeting. When contacted, the bank's spokesperson refused to comment saying "the matter is sub judice".

While Gogia claims she has the right due to her status as legal heir, the bank argues that she may not pass muster with the RBI's fit and proper criterion for bank directorship.