YES Bank promoters’ wealth swells

Beena Parmar Mumbai | Updated on June 11, 2014 Published on June 10, 2014

Rival promoters of YES Bank — Rana Kapoor and Madhu Kapur — have seen their investments in the bank multiply 55 times in the last 10 years. Rana and Madhu are also the largest shareholders in the bank, holding (directly and indirectly) 13.64 per cent and 11.91 per cent stake, respectively.

Rana Kapoor’s shareholding in the bank is worth over ₹2,788 crore (directly and indirectly), while Madhu Kapur’s shareholding is valued at around ₹2,436 crore, against the original investment of about ₹52 crore each.

In addition, the dividend of ₹8 a share payable this month will increase Rana Kapoor’s and Madhu Kapur’s wealth by ₹39 crore and ₹34 crore, respectively.

Madhu Kapur to shareholders

On May 30, Madhu Kapur, who inherited her late husband Ashok Kapur’s stake and is fighting a legal battle against the Bank, wrote to the shareholders to vote against seven resolutions at the annual general meeting due to be held on June 14.

Madhu Kapur and Rana Kapoor’s wife are sisters. Madhu Kapur took the bank to court in June last year seeking promoter rights to nominate directors on the board.

In an emotional letter, Kapur wrote to the shareholders seeking a redress to her “grievance by placing certain facts which have been suppressed by the Bank and Rana Kapoor, so that you (shareholders) can better judge how you can exercise your vote; by voting against him or at least by abstaining from voting in his favour”.

She claimed that the resolutions are not in the interest of the bank or its shareholders and the appointment of Rana Kapoor was in breach of the Articles of Association as per The Banking Regulation Act.

She alleged non-transparency citing an attempt to convert Ravish Chopra, who was earlier nominee director, into an independent director and appointed employees as “whole-time directors” without disclosing the relevant details about it to the shareholders and in the Annual Report.

YES Bank note

YES Bank in a note to shareholders has called Madhu Kapur’s allegations against the bank as “baseless, untenable and defamatory”.

It has claimed that a close reading of the AGM Notice would “unequivocally establish that the board of directors and management consist of competent and professional individuals who enjoy stellar reputation and standing. The credentials of the names put up for directorship are set out in the AGM Notice.”

Further, according to Madhu Kapur, “Mr Rana Kapoor could not have applied to be MD and CEO without my recommendation under Article 127, which obviously is not given to me….It is the total denial of my right to jointly recommend with Mr Rana Kapoor the Chairman and MD and the shareholders right to know the truth.”

Rana Kapoor’s term as CEO and MD ends on June 27 this year and his re-election will be proposed in the AGM. The bank said the RBI has approved Rana Kapoor’s re-appointment as MD and CEO till August 31, 2015.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on June 10, 2014
This article is closed for comments.
Please Email the Editor