Private sector Yes Bank was on Saturday forced to resort to paper ballots for appointment of three new directors on its board following dissent from one of the founding families.
The annual general meeting (AGM) of the bank was to approve appointment of Diwan Arun Nanda, Ravish Chopra and MR Srinivasan as whole-time directors by voice vote.
Three directors were sponsored by bank Managing Director and CEO Rana Kapoor, who holds 13.72 per cent stake in the bank, but were opposed by Madhu Kapur, wife of late Ashok Kapur and co-founder of Yes Bank.
Madhu Kapur, who holds 12 per cent stake in the bank, wants a say in board appointments. Shareholders attending the AGM said when the subject was taken up, Ms. Kapur opposed the move.
Following this, members were asked to cast paper ballots and results of the same would be known in 48 hours, they added.
The events come a day after Bombay High Court turned down a petition filed by Madhu Kapur objecting to the holding of AGM on the ground that they had not been consulted before appointment of directors.
According to shareholders present at the meeting, Ms. Kapur expressed dissent against the appointment of the directors due to which the AGM held at the bank’s headquarters Nehru Centre, had to carryout the voting.
Ashok Kapur, who died in 26/11 terror attacks at the Oberoi Hotel in Mumbai, had co-founded the bank with his brother-in-law Rana Kapoor and Rabobank in 2004.
According to sources, the feud between families of two founder members had started in 2009 after the board of Yes Bank declined to induct Shagun Gogia, the daughter of late Ashok Kapur, as a nominee board member.
The board of the bank had declined to induct Ms. Gogia saying that she might not be eligible as per ‘Fit and Proper’ criteria laid down by the Reserve Bank of India, sources said. However, one of the close associates of Shagun Gogia, on Saturday said: “It is for the RBI to decide if Shagun is ’fit-and-proper’ or not. Rana Kapoor cannot decide this unilaterally.”
When pointed out that if the bank board does not pass her name, then it cannot be sent to the RBI, Gogia’s close associate said, if the board did not pass her name, then they would have to approach the High Court.
Meanwhile, one shareholder attending the AGM said that the issue should be sorted out as soon as possible, which otherwise would affect the reputation of the bank.