Mumbai, July 14: Amid a continuing stalemate between two factions of Yes Bank's founder family, the Madhu Kapur camp has filed a revised petition before the Bombay High Court against the appointment of three new whole-time directors.
Alleging lack of corporate governance at the bank, the Madhu Kapur faction, whose request for appointment of Shagun Gogia as a director has been rejected by Yes Bank, is also seeking the court intervention to protect their interest. The petition is slated for hearing tomorrow.
At the last hearing on July 8, the Yes Bank counsels had opposed some of the amendments by Madhu Kapur to her original petition, following which Justice S J Kathawala adjourned the matter to July 15. While Madhu Kapoor and her two children (Shagun Gogia and son Gaurav Kapur) together hold 12 per cent interest in the bank, the current Managing Director and chief executive Rana Kapoor, who along with the late Ashok Kapur, co-founded the bank in 2003, holds 13.7 per cent.
Madhu's sister Bina is married to Rana. Amendments to the original petition seen by PTI seek a reversal of the recent appointments of senior bank executives, Sanjay Palve, Rajat Monga and Pralay Mondal, as whole-time directors of the bank, saying the Kapurs were not consulted on this, despite being a promoter entity.
The amended petition highlights how Rana Kapoor did not recuse himself during the appointment of Ravish Chopra and Diwan Arun Nanda as additional directors in October 2012 even though he had nominated them. Also, according to minutes of the nomination and governance committee meeting, there was only one other director, Arun K Mago, in attendance.
"Rana Kapoor's participation vitiated the free and fair assessment of these nominations," says the petition, while a person close to the Kapurs also questioned the veracity of the committee, if only one eligible person (Mago) was present, that made these appointments.
The Kapurs have already challenged the appointments of three other directors -- Diwan Arun Nanda, Ravish Chopra and M R Srinivasan -- on the bank board, at the High Court. Apart from seeking to reverse appointments of the new trio, which was done even as controversy raged, the amended petition also wants court to prohibit Rana Kapoor from making any new director level appointments without consulting Kapurs.
They also allege that the business at the bank's annual general meeting held on June 8 was not conducted properly, saying the minutes did not have important details like the number of shareholders and the proxies present or why one S L Kapur, who is neither a shareholder nor a director, was allowed to speak at the AGM.
Therefore, the petition seeks to access the video recording of the AGM to ascertain facts. Additionally, the petition points out that two of the directors - M R Srinivasan (69 years, who also is non- executive chairman of the bank) and Nanda (again 69 years) - are well past the RBI prescribed age limit of 35 to 65 years and hence, do not meet the RBI's fit and proper criterion for being appointed as directors.
The Kapurs also question eligibility of Nanda, who was a member of the audit committee of the defaulter Kingfisher Airlines, till September 2011 and was nominated, even though the record of the airliner was well known. Madhu Kapur, the wife of the bank's co-founder Ashok Kapur, who was killed in the November 2008 terror attacks in the city, approached the Bombay High Court in June seeking a stay on the appointment of Srinivasan, Nanda and Chopra as the directors appointed by the promoters.
The Madhu Kapur group also alleges that ever since her husband's death, there were sustained efforts on part of Rana Kapoor to strike out the name of Ashok Kapur in all bank documents, including its annual reports and a book on the bank's history.
Madhu wants her daughter Shagun, appointed to the board as one of the promoter-nominee directors. The Bombay HC had earlier asked the bank board to consider the same, but the board declined it, saying Shagun does not meet the fit and proper criterion set by the RBI.
The board decision was "pre-determined and mala fide... the purported reasons given by the board for rejecting the nomination are malafide, perverse and unsustainable in law," the amended petition says.