YES Bank board says no to Shagun Kapur Gogia

Bank's board met on Thursday afternoon after the High Court directed bank to advance its board and consider Gogia's appointment

 

The board of YES Bank has rejected the application of Shagun Kapur Gogia, daughter of deceased co-founder Ashok Kapur, to be on its board. 

 

In a letter addressed to Gogia's mother Madhu Kapur, who holds 12% stake in YES Bank, the private lender said its board of directors after extensive deliberations has unanimously agreed not to accept her recommendation of appointing her daughter on the bank's board. The letter has been reviewed by Business Standard.

 

YES Bank's board met on Thursday afternoon after the Bombay High Court directed the bank to advance its board meeting by a month and consider Gogia's appointment. The board meeting was originally scheduled on July 24, 2013. Madhu Kapur and her two children (Gogia and Gaurav Kapur) had moved the court alleging their right as co-promoters was violated.

 

Sources familiar with the developments said the bank’s board reviewed the Reserve Bank of India's (RBI) guidelines and relevant laws while discussing Gogia's appointment. It also evaluated the past and present composition of YES Bank board and current composition of the boards of some of the other private banks in the country. 

 

The letter said Rana Kapoor, co-founder, managing director and chief executive officer of YES Bank voluntarily recused himself when the agenda of Gogia's appointment was considered in the nominations and governance committee meetings and subsequently in the board meeting.

 

While Gogia confirmed receipt of the letter, YES Bank declined to comment and reiterated the statement issued by the bank on Thursday morning. "As the matter is sub-judice, the final decision of the board on the subject will be submitted to the court at its scheduled hearing on July 1 as per the court order," the bank had said ahead of its board meeting on June 27, 2013. Bombay High Court is scheduled to hear the case on Monday.

 

The bank had said on Friday it will induct three of its top management executives on the board to reinforce its positioning as the 'Professionals Bank of India'.

 

Rajat Monga (senior group president for financial markets and chief financial officer), Sanjay Palve (senior group president and senior managing director for corporate finance) and Pralay Mondal (senior group president for branch, retail and business banking) will join the board subject to RBI's and shareholders' approval.