The two promoter groups of private lender YES Bank are in talks to end their long-drawn conflict, and draft consent terms are being discussed but a deal is still some time away. The sticking point still seems to be ensuring equal rights and representation, said sources in know of the development.
“The discussions are a work in progress and both parties have put forth their wish lists. The articles (of association) state equal rights and our wish is simply that those be upheld,” said a source close to co-promoter Madhu Kapur. Sources close to rival co-promoter and MD and CEO Rana Kapoor told PTI that settlement talks were at an “advanced stage” with draft consent terms under discussion. The draft, he said, spoke of recognising both the groups as “equals”.
Kapoor’s three-year reappointment as MD and CEO was cut short by a Reserve Bank of India order recently. He will be in office till January 31, 2019.
If the peace proposal goes through, the two promoter groups will jointly recommend the successor to Kapoor and non-executive chairman subject to the board and regulatory approval.
The two rival groups have been in active discussion since YES Bank’s request for extending Kapoor’s term was rejected.
They will nominate a non-executive director each and jointly nominate one non-executive director to the board.
An email sent to YES Bank remained unanswered till the time of going to press.
The markets have reacted negatively to the uncertainty around the bank’s succession. The bank’s stock has dropped by more than 40 per cent since the RBI shortened Kapoor’s term in September.
Business Standard had reported the bank planned to submit the names of managing director and chief executive officer candidates by December 15. An external candidate was highly likely and that Rajat Monga, senior group president at YES Bank, was the only internal candidate being considered. The bank has formed a committee of internal and external members and hired a head hunter firm to assist in the search of a successor. The bank’s stock closed at Rs 183.15 on the BSE on Tuesday, down 2.55 per cent from the previous close.
(With inputs from PTI)