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Madhu Kapur justifies fight to Yes Bank shareholders

LiveMint logoLiveMint 14-06-2014 Joel Rebello

Mumbai: Madhu Kapur, the widow of late co-founder of Yes Bank Ltd Ashok Kapur on Saturday spoke to the shareholders of the bank justifying her fight against the present management.

In a prepared speech to shareholders at Yes Bank’s 10th annual general meeting (AGM), Kapur said she had “little choice” but to go to court.

Invoking her late husband in an emotional appeal, Madhu Kapur also addressed Yes Bank managing director and chief executive officer, Rana Kapoor.

“I can say confidently Rana, my husband Ashok would not have treated your wife Bindu in the manner you have treated me,” Madhu Kapur said.

Madhu Kapur and Bindu Kapoor are sisters.

She told shareholders that her dispute with the management doesn’t even find mention in the bank’s annual report. “I spoke at the last AGM. However, the minutes prepared by the present chairman did not find any mention of me. The minutes got sanitized. I suspect the same will be repeated...just as my husband’s name lapsed from the memory of the bank and reappeared five years after his demise when I filed the case in the high court,” Kapur said.

Madhu Kapur and her family took Rana Kapoor and Yes Bank to court in June 2013 demanding the right to nominate a director to the bank’s board under the articles of association of the bank. Her husband Ashok was killed in the 2008 Mumbai terrorist attacks.

Madhu Kapur’s daughter Shagun Kapur Gogia had also applied to be a member of the bank’s board, as directed by the court in June 2013, but the board rejected her nomination, ostensibly because she lacked sufficient experience.

“In court, Rana Kapoor’s and the board’s stand is that I don’t have any rights under the articles. So be it. Then let the case be heard on its merits... In the entire annual report, you will not find any reference to the court order or even the suit filed by me. Does the bank and the board not think it necessary to disclose this fact to you, the shareholders? Till this year, Ashok Kapur’s name did not exist and now even the litigation does not exist. Is this transparency and corporate governance,” Madhu Kapur asked.

Kapur is also opposed to the appointment of the new directors because she, being a co-promoter, was not consulted about it.

The new directors were appointed by the bank in June 2013.

The three nominee directors—M.R. Srinivasan, Ravish Chopra and Diwan Arun Nanda—were not “fit and proper” to serve on the bank’s board, the petition had said. It had also challenged appointment of three other Yes Bank directors: Rajat Monga, Sanjay Palve and Pralay Mondal, who have been named respondents in the case.

The results of the shareholder voting at the AGM will be declared by Monday.

The next hearing in the one-year-old case is on 19 June.

Earlier on 12 June, a single-judge bench of the Bombay high court directed Yes Bank to furnish documents related to the bank’s communication with the Reserve Bank of India (RBI) and the capital markets regulator Securities and Exchange Board of India (Sebi) on the “de-classification” of Kapur’s status as a promoter of the bank.

Meanwhile, M.R. Srinivasan, who is also non-executive chairman of Yes Bank, in response to a query to the bank after the AGM, said: “The second largest shareholder who has raised some issues about governance has recommended the approval of resolutions pertaining to the finalization of the books of accounts, and for payment of dividend, which is an all time high of 80%, and also the highest among any peer banks in their 10th year. The said shareholder has not challenged the same. Under these circumstances, the intent behind such allegations is clearly mala fide, and to pursue vested interest.”

“This is despite the fact that the honourable Bombay high court has vide its order dated 12 June 2014 rejected an application for grant of any ad-interim reliefs against passing of resolutions at the ensuing AGM, which was sought by the said shareholder. I am satisfied that the board of the bank has always acted in a manner which is in accordance with law and has upheld the principles of corporate and management governance,” Srinivasan added.

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