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Business News/ Companies / News/  Yes Bank case: HC tells Rana Kapoor, Madhu Kapur to resolve dispute amicably
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Yes Bank case: HC tells Rana Kapoor, Madhu Kapur to resolve dispute amicably

A two-judge bench asks both the parties to 'try and work out a solution' within a week

Madhu Kapur and her family took Rana Kapoor (pictured) and Yes Bank to court in June 2013 demanding the right to nominate a director on the bank’s board. Photo: HTPremium
Madhu Kapur and her family took Rana Kapoor (pictured) and Yes Bank to court in June 2013 demanding the right to nominate a director on the bank’s board. Photo: HT

Mumbai: The Bombay high court (HC) has directed Rana Kapoor, chief executive and managing director of Yes Bank Ltd, and Madhu Kapur to amicably resolve a dispute relating to Kapur’s right to nominate directors on the bank’s board.

A two-judge bench of justices S.J. Vazifdar and B.P. Colabawalla asked both the parties on Tuesday to “try and work out a solution" within a week.

Kapur is the widow of Ashok Kapur, one of the promoters of Yes Bank along with Rana Kapoor. Rana Kapoor’s wife Bindu Kapoor and Madhu Kapur are sisters. Ashok Kapur died in the 26 November 2008 Mumbai terrorist attack.

“It’s not right for us to decide on this issue after what they (Kapur’s family) have gone through," said Vazifdar while adjourning the case to 15 April.

Last week, Yes Bank filed an appeal before a division bench of Bombay high court, challenging the court’s 24 March ruling that it has the jurisdiction to hear the plea of Madhu Kapur.

“Fortunately for us also, this application is an emotional one," Vazifdar added.

Yes Bank has also requested a stay on the 24 March order by justice Suresh Gupte that the case will henceforth be heard on its merits, overruling Yes Bank’s contention that Kapur’s plea is not maintainable and should be dismissed.

On Tuesday, Aspi Chinoy, senior counsel representing Madhu Kapur, and Soli Cooper, senior advocate representing Rana Kapoor in the court, said they will call a meeting of both the parties once again to negotiate a settlement.

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 the articles of association of the bank. Kapur has also challenged the nominations of Arun Nanda, Ravish Chopra and M.R. Srinivasan as directors.

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.

This is not the first time when the high court has asked both the parties to resolve the issue through negotiations.

In June, Justice S.J. Kathawala, after hearing the petition for the first time, said, “The way she (Shagun Kapur Gogia) has addressed (Rana Kapoor) in her letters, it seems that the dispute has not gone ugly. Let’s sort it out before it gets ugly."

Kathawala’s comment was in reference to a letter written by Gogia to Kapoor in May requesting him to consult the Kapur family before appointing three directors on the board of the bank. In her letter, which was produced in court, Gogia referred to Kapoor as “Dear Rana Uncle".

Subsequently, Madhu Kapur’s daughter Gogia applied to be on the bank’s board, as directed by the court, but the board rejected her nomination, ostensibly because she does not have sufficient experience to be a director. This led to a breakdown in the settlement talks.

Gogia declined to comment. “I only know sthat the lawyers have been asked to meet to find a solution," she said.

Madhu Kapur holds a 12% stake in Yes Bank while Rana Kapoor, directly and through other family-owned ventures, holds a 13.59% stake in it.

Based on Monday’s closing price, Yes Bank’s market capitalization is 15,435 crore, valuing the Madhu Kapur group’s holding at 1,852.20 crore and the Rana Kapoor group’s holding at 2,097.62 crore.

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Published: 08 Apr 2014, 12:44 PM IST
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