Will never sell my shares in Yes Bank, says CEO and MD Rana Kapoor
Rana Kapoor's no-sale pledge followed reports that Madhu Kapur had sold 0.04% of her stake in the open market
Mumbai: His term cut short by the Reserve Bank of India (RBI), Yes Bank managing director and CEO Rana Kapoor posted a series of unconventional messages on social networking site Twitter on Friday, calling his shares in the bank “diamonds" and vowing not to sell them to cut his or his family’s promoter-holding in the bank.
Yes Bank is heading for a lengthy search for a new boss after the RBI, on 17 September, restricted Kapoor’s tenure. Yes Bank’s complex articles of association (AoA), which the Bombay high court ruled in 2015 must be followed by two of its warring promoters, will make the board’s task harder.
The articles of association was agreed upon by the bank’s promoters in 2005 and amended in September 2017.
In June, the bank’s board sought a three-year extension for Kapoor till 31 August 2021, but the regulator agreed to extend his tenure only till 31 January 2019.
The board, on 25 September, said it will request RBI to extend Kapoor’s tenure till September 2019, but analysts say the RBI is unlikely to agree.
The bank’s board at its meeting on 25 September, decided to set up a search committee to identify a successor to Kapoor. The committee will include three existing nomination and remuneration committee board members, along with two external experts.
“The board has not been able to give a clear picture on the succession and further course for the bank. The timelines and uncertainty on approvals from RBI for both MD & CEO (should be difficult) and EDs will keep near-term stock performance muted," said analysts at research firm Prabhudas Lilladher in a 26 September note.
The board has decided to promote two of Yes Bank’s senior officials and Kapoor’s trusted lieutenants Rajat Monga and Pralay Mondal as executive directors, subject to RBI approval.
“We believe the dissent with other promoter group may prevent this," analysts from Deutsche Bank said in a 26 September note to its investors.
“As per its Articles of association, both promoters have to jointly appoint any new directors on the board. In the past as well, the appointments of new EDs could not materialize due to differences in opinion between the promoter groups," said the note by Deutsche Bank
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