Madhu Kapur allowed to challenge YES Bank AGM resolutions

Currently, Rana Kapoor holds 11.87% stake in YES Bank, while Madhu Kapur and her company own 10.37%

The high court here on Thursday said Madhu Kapur, widow of YES Bank co-founder Ashok Kapur, would be allowed to challenge all the resolutions that might be approved at YES Bank’s annual general meeting (AGM) on Saturday.

At the AGM, shareholders will vote on seven resolutions, including the appointment of directors, which had first led Kapur to challenge Rana Kapoor, the bank’s managing director and chief executive, in court.

It is expected the results of the vote will be known by June 15.

On Thursday, judge G S Patel also directed Rana Kapoor to share with Madhu Kapur the bank’s communication with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi). However, the court said the information provided to Kapur couldn’t be circulated or put in the public domain.

YES Bank has sought approval from RBI and Sebi on moving Madhu Kapur out of the promoter category. “Madhu Kapur, being successor of the late Ashok Kapur, cannot be considered an Indian partner or India promoter and, accordingly, cannot inherit the rights under Articles of Association or the status of promoter of YES Bank,” the bank had said in a statement in April.

Currently, Kapoor holds 11.87 per cent stake in YES Bank, while Madhu Kapur and her company own 10.37 per cent.

Dinyar Madan, Kapur’s counsel, argued most of the resolutions being tabled for shareholder approval would have to be approved by the court. For instance, he said, the remuneration of directors Ravish Chopra and M R Srinivasan is to be approved by the board at the AGM, but their appointment had been challenged in court.

Ashok Kapur had co-founded YES Bank with his brother-in-law Rana Kapoor. Madhu Kapur and Bindu, Rana Kapoor’s wife, are sisters.

Last year, Madhu Kapur had moved the Bombay High Court, claiming her right as co-promoter was violated, adding she wasn't consulted before the lender had appointed directors on its board.

The next hearing in the case is scheduled for June 23.