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Yes Bank board refuses to recognize Madhu Kapur as promoter

Kapur has been seeking to assert her right to name directors as the widow and legal heir of co-founder Ashok Kapur over the past five years.

, ET Bureau|
Updated: Apr 28, 2014, 11.30 AM IST
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Kapur has been seeking to assert her right to name directors as the widow and legal heir of co-founder Ashok Kapur over the past five years.
Kapur has been seeking to assert her right to name directors as the widow and legal heir of co-founder Ashok Kapur over the past five years.
MUMBAI: The row at YES Bank over the right of a founder’s survivors to nominate directors is right back to where it started despite the Bombay High Court asking both sides to settle the issue amicably, with the board rejecting the contention that Madhu Kapur qualified as a promoter.

Kapur has been seeking to assert her right to name directors as the widow and legal heir of co-founder Ashok Kapur over the past five years.

The other co-founder Rana Kapoor, currently managing director and chief executive, has been resisting the demand by Kapur that she be allowed to nominate directors. On Friday, the board met to discuss the issue following the court's advice and reinforced its stand against her, saying it was bound by the rules.

“Mrs Madhu Kapur being successor of Late Mr Ashok Kapur cannot be considered as Indian partner or India promoter and accordingly, cannot inherit the rights under articles of association or the status of promoter of YES Bank, the bank said in an emailed statement.

“Since the advocates of Mrs. Madhu Kapur as start up to any amicable resolution require the bank to recognise her rights as Indian partner, the board is not in a position to accede to any such request for the reason mentioned above.” This decision is in conformity with the Banking Regulation Act, YES Bank said.

Not recognising Madhu Kapur as either an 'Indian partner’, or ‘Indian promoter’ is a setback to the court-advised amicable-settlement process, said two people close to the situation who didn't want to named.

Kapur contends that she inherited not just her late husband’s economic interests in the bank but also his right to nominate a director. Rana Kapoor and Ashok Kapur jointly founded the bank in 2004. Ashok Kapur was killed in the Mumbai terrorist attacks of November 2008. Incidentally, Kapoor is married to Madhu Kapur’s sister.

Madhu Kapur had gone to court seeking its intervention after YES Bank rejected her request to nominate directors. Subsequently, she also challenged the appointment of two other directors. Shagun Kapur Gogia, Madhu Kapur's daughter and party to the suit filed against YES Bank, declined to comment on the board’s decision as the matter is sub-judice.

In June last year, the bank board had considered Gogia's nomination as director at the behest of the Bombay High Court. But it rejected the application citing the composition of boards of bigger rivals such as institution-promoted ICICI Bank and HDFC Bank and what it said was lack of experience in the field of finance.

Madhu Kapoor owns a 11.92% stake in the bank while Rana Kapoor owns 13.64%.

Also Read

Madhu Kapur sold some shares in Yes Bank

Yes Bank's Rana Kapoor in talks with Madhu Kapur for truce

Rana Kapoor, Madhu Kapur meet to give peace a chance

Madhu Kapur moves Bombay HC to stop appointment of Yes Bank directors

Madhu Kapur questions nomination rights of Rana Kapoor

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