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Yes Bank case: Bombay HC has jurisdiction to hear Madhu Kapur’s plea

LiveMint logoLiveMint 09-05-2014 Khushboo Narayan

Mumbai: The Bombay high court on Friday ruled that it had the jurisdiction to hear the plea by Madhu Kapur, widow of Yes Bank Ltd’s co-founder Ashok Kapur, seeking to nominate directors on the board of India’s youngest bank.

The bank had challenged the court’s earlier ruling by a single judge that it had the jurisdiction to hear the plea of Kapur.

A division bench comprising justice S.J. Vazifdar and B.P. Colabawalla on Friday rejected Yes Bank’s challenge and said it will issue the complete order in a week.

Kapur is the widow of Ashok Kapur, who was one of the promoters of Yes Bank along with managing director and chief executive Rana Kapoor. Rana Kapoor’s wife Bindu Kapoor and Madhu Kapur are sisters. Ashok Kapur was killed in the November 2008 terrorist attacks in Mumbai.

A person close to Madhu Kapur said that they are now waiting for the next move from the bank.

“It is possible that they may appeal to the Supreme court so we will wait and watch,” he said.

Yes Bank did not respond to an email seeking comment.

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, citing the articles of association of the bank.

Yes Bank’s contention has been that since the directors of the bank were elected by shareholders and under section 10 A (6) of the Banking Regulation Act, the court had no jurisdiction to hear the plea.

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, but the board rejected her nomination in a meeting held the same month, ostensibly because she does not have sufficient experience.

Madhu Kapur holds an 11.91% stake in the bank, while Rana Kapoor, directly and through other family-owned ventures, holds a 13.64% stake, according to the shareholding pattern of the bank as of 31 March.

The next hearing is scheduled for 19 June.

Replying to a query a Yes Bank spokesman said, “We are yet to receive the entire court order, we will decide the further course of action post discussion with our legal team.”

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