With the Reserve Bank of India (RBI) refusing to extend Rana Kapoor’s tenure as Yes Bank’s CEO & MD, efforts are under way to bring about rapprochement between the two feuding promoter-families with an objective to safeguard the bank’s as well as their own long-term interests.
The family of Yes Bank co-founder-cum-promoter and former chairman late Ashok Kapur, which includes his spouse Madhu Kapur, daughter Shagun Gogia and son Gaurav Kapur, who were earlier kept away from having any say in the running of the bank and exercise their rights that had led to a legal battle, have now been approached for a truce through a mediation process.
A resolution plan has been shared by the Rana Kapoor group with Mr. Kapur’s family.
Both sides had not been on talking terms since 2013 when Ms. Kapur and Ms. Gogia moved the Bombay High Court following rejection of their plea to nominate a director on the board.
In the past two weeks, several meetings had reportedly taken place and more are expected to reach an amicable solution.
“Discussions are on in an extremely positive direction. Meetings were happening in a cordial atmosphere and they discussed how they could work together as promoters for the benefit of the bank,” a person with direct knowledge of the development said.
Yes Bank officials declined to comment. Repeated calls and text messages to Ms. Gogia for a comment yielded no response.
As part of this peace process, a proposal has been mooted to pull back the appeals filed. In June 2015, the Bombay High Court had ruled that the Ashok Kapur family can exercise its rights as successors of the late banker who was killed in the 2008 terrorist attack in Mumbai. The other side had challenged this.
The mediation started on October 7 with a meeting between sisters Madhu Kapur, Bindu Kapoor (spouse of Mr. Rana Kapoor) and Neeru Puri, where Ms. Gogia was also present. One more round of meeting also took place on that day.
Later, Mr. Kapoor met Ms. Kapur and Ms. Gogia on October 11 and separately met Mr. Gaurav Kapur the next day.
The need for the promoter groups to work together has become a necessity because Article 110(b) of the Article of Association mandates that collectively they can exercise rights but individually they cannot. Now, collectively their holding is 20%. (10.7% with Rana Kapoor and 9.3% with Ashok Kapur family).
“The working together of both the promoter sides is crucial to ensure that the bank, its 80% other shareholders, 20,000 employees and their families and three million customers benefit from the positive-minded and collaborating promoters,” the person said.
Better information parity
“Collectively working will help them collaborate. It has been agreed to bring better information parity through periodic and frequent meetings and ensure equal footing for both the groups, which was lacking earlier,” the person added
“This will facilitate strong governance at board level with full freedom to form policy, supervision and execution of strategy at the new management level. This is crucial as the bank is now a large institution and also widely held beyond the two promoters,” according to the person.
