Rana Kapoor, Managing Director and CEO of YES Bank, plans to “refresh” and amend the bank’s Articles of Association (AoA) to deal with the issue of joint nomination of directors on the company’s board.
In an interview with BusinessLine , Kapoor said the Articles of Association might not be relevant in today’s operational scope of the bank and need to be revalidated. He said there are more practical alternatives.
“It’s the view of the board that the same knowledge and depth of Ashok Kapur on banking matters does not apply or get bequeathed to his family. These are not rights which can be inherited and thus the rights of Ashok Kapur cannot be bequeathed,” he said.
Kapoor’s comments follow a decision by the Bombay High Court allowing joint nomination by the two promoters of YES Bank.
Rana Kapoor said that the current situation in YES Bank borders on activism, when a shareholder (Madhu Kapur) holding a 10.3 per cent stake is in conflict with the remaining shareholders, who have voted in favour of the bank.
“The key point in the High Court order is that we need to amend the Articles of Association to reflect the structure of the bank today…,” said Kapoor.
“We are on our way to become a meaningful large bank by 2020, the organisation requirements and its governance structures have changed and the Articles need to be amended accordingly to reflect today’s adjusted realities,” he said.