Rentala Chandrashekhar resigned as independent director of YES Bank because he was unhappy with internal developments and not — as the bank initially claimed — personal reasons, said sources aware of the matter on Tuesday.
On Monday, the bank had reported “personal reasons” as the cause of Chandrashekhar’s exit, but removed the reason on Tuesday afternoon from its fresh filings on the resignation with exchanges. However, the stocks had been hit by then: It closed at Rs 192.55 on the BSE, down 6.1 per cent over the previous close.
Former Nasscom president and former telecom secretary, Chandrashekhar, had, in his resignation letter, said he was deeply concerned about recent developments at YES Bank and dismayed over how the issues were handled at a time when the bank needed to carefully transition towards a new leadership, said sources.
He had joined in April and had a tenure of seven-and-a-half years. He also quit as chairman of the bank’s information technology strategy committee.
Chandrashekhar, however, was reluctant to elaborate why he resigned. “The reasons… have been stated in my resignation letter and I have nothing further to add,” he said in a phone call, while confirming that the reasons were not of a personal nature.
Sources at YES Bank said Managing Director (MD) and Chief Executive Officer (CEO) Rana Kapoor as well as several other people tried to convince Chandrashekhar to not quit, as it might adversely affect the market value and stability of the bank. They requested him to stay on till at least April and see through the transition. But Chandrashekhar remained unconvinced.
YES Bank did not reply to an email sent to it on Tuesday afternoon.
Press Trust of India on Monday reported promoter groups led by Rana Kapoor and Madhu Kapur were in favour of an overhaul of the bank’s board. “The new board members will be acceptable to both the promoter groups...to weed out under-performing members and address past governance issues,” the story claimed.
Chawla cited the current transition period, saying that “the bank would need a chairman who could devote more time and attention”. The BSE filing said that Gujarathi resigned because of “personal commitments”.
The bank said it would also find a replacement for Chandrashekhar.
The numerous exits from the bank’s board have raised questions about its internal functioning and the markets are reacting to this uncertainty, say experts.