Tempers flared at the ninth Annual General Meeting (AGM) of YES Bank on Saturday, with the Madhu Kapur camp forcing a vote on the resolution relating to the appointment of three whole-time directors.
Madhu Kapur, widow of the bank’s co-founder, Ashok Kapur, had petitioned the Bombay High Court to stay the AGM. She and her family argued that they were not consulted by her brother-in-law and the present Managing Director and CEO, Rana Kapoor, before nominating the three directors.
The High Court turned down Madhu Kapur’s petition on Friday and refused to stay the AGM.
On October 27, 2012, in a filing to the BSE, YES Bank had said that it was appointing Ravish Chopra, Diwan Arun Nanda and M.R. Srinivasan as additional directors.
While Rana Kapoor holds 13.72 per cent in the bank, Madhu holds 12 per cent that she got after Ashok Kapur’s death in the 26/11 Mumbai terror attacks. The Madhu Kapur family, which has no nominee on the board, argued that according to the bank’s Articles of Association, it must be consulted before the appointment of whole-time directors.
In 2009, the family had proposed the name of Shagun Gogia, daughter of Ashok and Madhu, to bank’s board. However, the board had declined this request, saying she did not meet the “fit-and-proper,” criteria set out by the Reserve Bank of India.
After Saturday’s AGM, Shagun declined to comment stating that the High Court had barred her from speaking to the press. But an associate of Shagun, who declined to be named, said it is for the RBI to decide if she meets the “fit-and-proper” criteria. “YES Bank cannot make unilateral judgments,” the associate said.
The matter will come up again for hearing on Monday at the Bombay High Court.
The management declined to comment, pending the outcome of the voting. It only said the result would be made public in the next 48 hours.
According to shareholders who attended the AGM, a few tried to raise the issue with the management but in vain. The AGM was closed to the media.
A few shareholders told newspersons outside the hall that they asked the management to sort out the issue quickly. “We told them that they have to sort out the issue as soon as possible. Once it comes in the media, YES Bank’s reputation will be affected. Share prices will crash. Who will be the sufferers?” asked a shareholder Homa B. Pouredehi.
Another shareholder said: “They (the Kapur family) should have been consulted. What YES Bank is doing is not ethical.”