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Business News/ Industry / Yes Bank counters Madhu Kapur’s claims
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Yes Bank counters Madhu Kapur’s claims

Yes Bank, in a letter to shareholders, accuses Madhu Kapur of making 'baseless' allegations against the bank

In its letter sent to shareholders on Thursday, Yes Bank said that the agenda of the AGM was finalized in a ‘transparent and legally compliant manner’. Photo: Abhijit Bhatlekar/ MintPremium
In its letter sent to shareholders on Thursday, Yes Bank said that the agenda of the AGM was finalized in a ‘transparent and legally compliant manner’. Photo: Abhijit Bhatlekar/ Mint

Mumbai: The war of words between the feuding promoters of Yes Bank Ltd got shriller on Thursday when the private sector lender accused Madhu Kapur, wife of late co-founder Ashok Kapur, of making “baseless and untenable allegations" against the bank.

“The business and financial results of the bank speak for itself," Yes Bank said on Thursday in response to Madhu Kapur’s 30 May letter. “The bank has consistently shared the wealth in the form of dividends with the shareholders over the last five years, when it started giving dividends."

Madhu Kapur’s daughter Shagun Kapur Gogia called the bank’s response “a classic case of obfuscation."

“It is significant that the matters of fact are not disputed but termed defamatory and sought to be obfuscated with statistics wholly irrelevant to the corporate governance issues raised," she said by email. “If a man makes a lot of money, does it mean that he is healthy? When asked by a cardiologist, you do not provide your bank statement, but you give him your cardiogram. For a long-term sustainable profitable bank, corporate governance should be paramount."

Yes Bank in its letter said that Madhu Kapur had not challenged the finalization of the books of accounts and payment of dividend recommended by the board and its management, which is at an all-time high of 80%. Mint has seen a copy of the letter.

Madhu Kapur and her family are fighting a court case against Yes Bank managing director and CEO Rana Kapoor demanding the right to nominate a director on the bank’s board. Madhu Kapur’s late husband Ashok Kapur, who was killed in the November 2008 Mumbai terror attack, co-founded Yes Bank with Rana Kapoor. She and Rana Kapoor’s wife are sisters.

In the letter, Madhu Kapur asked shareholders to “vote against, or at least abstain from voting in his favour", when Kapoor’s appointment comes up for approval at the bank’s annual general meeting (AGM) on 14 June.

Accusing Kapoor of running the bank “as his own fiefdom without any checks and balances", Madhu Kapur also asked shareholders to oppose the appointments of Mukesh Sabharwal, Radha Singh, Ravish Chopra, Brahm Dutt, Saurabh Srivastava, Vasant Gujarathi, Ajay Vohra and Diwan Arun Nanda as independent directors.

In her letter, Madhu Kapur asked shareholders to vote against the appointment of M. Srinivasan as non-independent director and non-executive chairman of the bank.

“M. Srinivasan’s appointment...has been approved by RBI (Reserve Bank of India) and he is also duly elected by the shareholders by an overwhelming majority at the previous AGM of the Bank. The resolution proposed at this AGM is for seeking approval of shareholders for payment of remuneration to the chairman for his service rendered as per the RBI approval," the bank responded.

Referring to Srinivasan’s appointment, Gogia said neither the notice for the meeting nor the resolution passed at it made any reference to his appointment as a non-executive chairman or his remuneration.

“The issue is not of profits, price of share or dividends," she said. “The issue is of legality, corporate governance and fair play."

Vaibhav Agrawal, vice-president research at Angel Broking Ltd, said the conflict has so far had not a material impact on the running of the bank and the market will only take notice if there is a negative surprise in the case.

“The current management is firmly in control and we are not focusing on the case because any negative surprise is a remote possibility. Unless there is a big change like if the present management is ousted, the case will not be in focus for the market," Agrawal said.

Meanwhile, Yes Bank said in regulatory filing that arms of Goldman Sachs Group Inc., Switzerland Finance Corp. and Morgan Stanley had bought shares in the bank by subscribing to the qualified institutional placement last week.

The resultant issue of fresh shares has ensured that the shareholding of Madhu Kapur’s group has dropped to 10.37% from 11.91% before the issue, while Rana Kapoor’s group holding has declined to 11.87% from 13.64%.

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Published: 05 Jun 2014, 05:37 PM IST
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