Yes Bank is yet to find CEO Rana Kapoor’s replacement1 min read . Updated: 14 Dec 2018, 02:02 PM IST
Yes Bank shares fell sharply as the market was expecting some clarity on the CEO appointment front at its board meeting today
Mumbai: Yes Bank Ltd has said it is on track to find a new managing director and chief executive officer to replace Rana Kapoor, as directed by the Reserve Bank of India (RBI). The bank’s search and selection committee and its board discussed on Thursday names of candidates shortlisted by Korn Ferry, a global executive search firm, to succeed Kapoor, it said in a press release on Thursday. The bank plans to present its final recommendation for the CEO to the RBI after its next board meeting scheduled for 9 January, it said.
Shares of Yes Bank closed 6.48% lower at ₹ 174.70 on the BSE, sharply underperforming a 0.47% rise in the benchmark Sensex, as investors worried over the lack of clarity on a successor to Kapoor.
“The Street was expecting some tangible outcome from the 13 December board meeting. To the extent that the board will be able to refer names only after January board meeting shows that uncertainty will continue for much longer," said Krishnan A.S.V., vice president, SBI Cap Securities.
On 19 September, RBI had denied another term for Kapoor, citing persistent governance and compliance failures at the bank. Yes Bank reported a massive bad loan divergence between fiscal years 2014-15 and 2016-17. Since then, the country’s fourth-largest private lender has seen several exits by board members and even a member of the search committee set up to appoint Kapoor’s successor.
Meanwhile, Yes Bank’s nomination and remuneration committee (N&RC) and its board finalized the recommendation for a non-executive part-time chairman to replace Ashok Chawla who stepped down last month, it said. It did not elaborate but said requisite approvals will be sought from the central bank.
The bank’s board includes two new independent directors —T.S. Vijayan and Uttam Aggarwal.
On 27 November, Mint reported that RBI is inspecting Yes Bank’s exposure to Infrastructure Leasing and Financial Services Ltd (IL&FS), Dewan Housing Finance Corp. Ltd (DHFL), Indiabulls Group, and Sudhir Valia-promoted entities to verify any inter-connectedness among these entities. Separately, the two estranged promoters of the bank—Rana Kapoor and Madhu Kapur—are currently in talks to settle their legal disputes.