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Yes Bank asks for Sebi’s opinion on promoter Madhu Kapur

In May 2014, the Yes Bank board refused to grant Madhu Kapur 'Indian promoter' status as the widow and legal heir of cofounder Ashok Kapur.

Updated: May 07, 2014, 04.50 AM IST
Rana Kapoor, MD & CEO, Yes Bank
Rana Kapoor, MD & CEO, Yes Bank
MUMBAI: Yes Bank is seeking opinion from the market regulator on whether it should retain Madhu Kapur among the ‘promoter category’ in the shareholder filings since she was not the founder, though the legal heir of the cofounder Ashok Kapur.

The move may be part of the bank’s view that Kapur though a substantial shareholder does not inherit the rights provided to her late husband when the bank was found, said a person familiar with the development. “To ensure compliance with law, the bank is in the process of seeking regulatory clarifications on the matter from the authorities concerned,’’ said a Yes Bank spokesman.

Kapur and the bank are locked in a legal dispute over her rights to be considered a co-founder after Ashok Kapur died in a terrorist attack in Mumbai in 2008. She contends that being a legal heir of late Kapur, she also inherits the right to nominate a director. But the bank has turned down the plea.

In May 2014, the Yes Bank board refused to grant Madhu Kapur 'Indian promoter' status as the widow and legal heir of cofounder Ashok Kapur.

In June 2013, the bank board at the behest of the Bombay High Court had considered Shagun Kapur Gogia, daughter of Madhu Kapur, as director after the family challenged the nomination of a few directors on the bank board.But it rejected her application citing composition of boards of bigger rivals such as institutions-promoted ICICI Bank and HDFC Bank, and lack of experience in the field of finance.

In the past, the private sector lender had approached the Reserve Bank of India to declassify Madhu Kapur as a promoter. The Central bank has refrained from responding to the bank formally as the matter was subjudice.

“There is no formal process for classification or de-classification as a promoter and a third party or the regulator does not pass value judgment about whether a group member is a promoter or not,’’ said Sandeep Parekh, founder of Finsec Law Advisors. “De-classification can only occur with the person’s consent. If either of them disagrees, then they may need to enter into a formal dispute.’’

Recently, two companies saw a re-classification of its promoter shareholders. In JM Financial, the siblings of the firm’s founder Nimesh Kampani reclassified themselves as public shareholders. Similarly, at Gillette India, its promoter Saroj Poddar reclassified himself as a public shareholder.

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