Money & Banking

YES Bank promoters still in discussions on consent agreement

Surabhi Mumbai | Updated on January 31, 2019 Published on January 30, 2019

Families yet to decide on nominee directors

Promoters of YES Bank, who have indicated the beginning of a truce, are still in talks on the terms of the consent agreement that would help further smoothen operations at the private sector lender.

“The agreement between both promoters to nominate one director each on the board of YES Bank was reached over last weekend. The terms of the consent agreement are still under discussion and it has not been signed as of now,” said a person familiar with the development, adding that it may be done in due course.

Rana Kapoor, founder Managing Director and CEO, and one of the promoters of the bank, has been in talks with the other promoter group of Madhu Kapur since last October, soon after the Reserve Bank of India asked him to step down by January 31. A consent agreement around parity in information, amongst other issues is under discussion.

As of now, there is also no decision on whether to withdraw the pending court cases by each side.

“There is no stay on the Bombay High Court judgment, which validates the terms of the Articles of Association. The article is in play. The case is still on appeal, if the consent document is signed, the appeal will be withdrawn,” the person said.

YES Bank on Tuesday announced that the two promoter groups of Rana Kapoor and Madhu Kapur have decided to nominate one representative director each on the lender’s board by April. This will help in better coordination and support to the new MD and CEO Ravneet Gill.

Sources said that as of now no decision has been taken by either of the two groups on who they will nominate.

“It is still early days. There is time till April. Each of the group will sit down as a family and decide on who they wish to nominate on the board,” said the person.

Rana Kapoor along with Madhu Kapur’s husband Ashok Kapur had founded YES Bank in 2003 with Kapoor as the Managing Director and CEO and Kapur as the Chairman. But disagreements started soon after Kapur tragically passed away in the 2008 Mumbai terror attacks and the Board in 2009 rejected a proposal by Madhu Kapur to nominate her daughter Shagun Gogia on the board.

Kapur had then in 2013 approached the Bombay High Court seeking rights to nominate directors on the bank’s board as the heir to her husband. This was upheld by the Bombay High Court but an appeal is pending and the matter is sub-judice.

On Wednesday, YES Bank shares fell 1.58 per cent and closed at ₹199.40 apiece on the Bombay Stock Exchange.

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Published on January 30, 2019
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