BackRana Kapoor’s board appointment subject to final order: Bombay high court
Yes Bank can file any objection to the court's order by 12 June, ahead of the bank's AGM on 14 June
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Mumbai: The Bombay high court said on Friday that board appointments at Yes Bank Ltd, including that of managing director and chief executive officer (MD and CEO) Rana Kapoor, will be subject to a final order by the court.
Justice S.C. Gupte’s comments came in the course of a hearing on an ad interim petition by Madhu Kapur, widow of Yes Bank co-founder Ashok Kapur. Ad interim is a Latin phrase that means temporary.
Gupte said that Kapoor’s appointment is also subject to the court’s final ruling. Yes Bank can file any objection to this order by 12 June, ahead of the bank’s annual general meeting (AGM) on 14 June. The Reserve Bank of India (RBI) has approved Kapoor’s appointment till August 2015.
The Madhu Kapur group has also challenged a point in the notice to the AGM which nominated Ajay Vohra and Diwan Arun Nanda as independent directors, giving them a five-year term which can be extended by a further five years through a special resolution.
“We filed the ad interim plea ahead of the AGM because our consent was not taken and now that the plea is filed Kapoor will have to compulsorily mention even in the bank reports that his appointment is subject to court order," said a person close to Madhu Kapur who didn’t want to be named.
Madhu Kapur and her family took Rana Kapoor and Yes Bank to court in June 2013 demanding the right to nominate a director on the bank’s board, citing articles of association of the bank.
Yes Bank’s contention is that since the directors of the bank were elected by shareholders and under section 10 A (6) of the Banking Regulation Act, the court has no jurisdiction to hear the plea.
Madhu Kapur’s daughter Shagun Kapur Gogia had also applied to be a part of the bank’s board, as directed by the court in June, but the board rejected her nomination in a meeting held the same month, ostensibly because she does not have sufficient experience to be a director.
In a letter to RBI, Madhu Kapur, Shagun Kapur Gogia and Gaurav Kapur, requested the central bank to “give no approval to any person as chairman or managing director of the bank unless it is jointly recommended by Rana Kapoor and us as per the articles of association."
Madhu Kapur is also opposing the new directors who were appointed by the bank in June 2013 because she, as co-promoter, had not been consulted before they were appointed.
The three nominee directors M.R. Srinivasan, Ravish Chopra and Diwan Arun Nanda were not “fit and proper" to serve on the bank’s board, the petition had said. It has also challenged the appointment of three other Yes Bank directors—Rajat Monga, Sanjay Palve and Pralay Mondal—naming them as respondents in the case.
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