ET BureauLast week’s Bombay High Court verdict in Yes Bank versus Madhu Kapur dispute is being interpreted differently. Bank chief executive Rana Kapoor believes his stance has been vindicated on the board seat for his late partner Ashok Kapur’s legal heirs. Shagun Gogia, daughter of late Ashok Kapur told ET she believes her uncle Rana Kapoor has been proved wrong. Edited excerpts:
How do you read the verdict?
By this verdict, our rights have been recognised jointly with Rana uncle. Most importantly, we cannot be declassified from our status as promoter. I believe this judgment has also exposed the vacuity of Rana uncle’s claims of professionalism, corporate governance and transparency. However, I continue to feel this court battle could have been avoided had Rana uncle dealt with the matter with some dignity and grace, especially respecting the rights of his late partner who died tragically in the Mumbai terror attack. Frankly speaking, in a family fight, nobody is a winner.
What will be the fallout?
The order received from the high court and the documents which form part of the record have many findings which have serious repercussions on the corporate governance issues enshrined in Clause 49 of the Listing Agreement. To state only a few facts regarding declassification effort: Rana Kapoor wrote four letters from 2010 to the RBI behind our back to declassify us from the promoter status, whilst all along telling us to trust him. His letter to the RBI asserted that “since Ashok Kapur had passed away and since his heirs were not involved in the management of Yes Bank and did not sit on its board, Ashok Kapur’s share ownership could no longer be classified as promoter ownership.” This was curious logic. He would not take us on the board or allow us any participation in the bank, while representing to the RBI that because we are not on the board or involved in management, we should be declassified as promoter! And all this behind our back! Is this the real reason my nomination was rejected, which the court has described as “churlish and vindictive”. The applications to the RBI to this end are motivated, self-serving and prima facie unlawful. …. I must note that even before me, Rana Kapoor and Yes Bank went to great lengths to withhold these documents.
Kapoor says the court has directed the bank to change Articles of Association you rested your case on
Rana uncle’s interpretation that the high court has directed him to amend the Articles appears to be a deliberate misreading of the order. The judgment states that as the Articles stand, both the promoters and the successors of the promoters have joint rights. If you want to change them or regulate them, then you may amend the Articles or reduce your joint shareholding below 10%. These are options, not directions. However, this reinforces that Rana Kapoor would go to any extent to deny us our rights. Rana Kapoor seems singularly motivated to deny us our rights, even if it is at the cost of losing his very own rights, which he has been exercising till date. Does he feel he doesn’t need these rights anymore? Currently, he is at the helm of management; he may feel he can continue to navigate at his own terms forever even without exercising these rights. Well, he should think again. The position of MD and CEO has a limited tenure and is subject to the regulator’s approval. If what MR Srinivasan told me in 2013 had any grain of truth, then his appointment as MD and CEO was approved by RBI only on the last day. What is permanent though is his status as promoter. Without the rights, which go along with promotership, he may find it difficult to influence the management and may face problems.
Kapoor says he doesn’t nominate people on the board...
Rana uncle claims to have no nominees on the board because the same nominees whom he once appointed are being converted into independent directors. Ravish Chopra was appointed as his nominee in 2013 and in 2014 was made an independent director. The same is the case with MR Srinivasan. In case of Ravish Chopra, the court observes, “To play ducks and drakes like this with director appointments is entirely impermissible.
Kapoor says this is a professional organisation, not a family estate...
Is this organisation so professional that you don’t pay homage to your late partner who tragically died in the terror attacks? Is the organisation so professional that you ring fence the copromoter family from the bank in totality? Is the organisation so professional that you blatantly hide facts from the family/court/Sebi/RBI? Is this truly a professional organisation and running like one or is it a one professional’s organisation?
How does nomination restrict or affect the Banking Regulation Act under section 10 and 5 where board of directors is fully empowered to make decisions? On the contrary, conduct of the organisation is not in consonance with all norms of corporate governance and transparency, which speaks volumes of the professionalism of the Bank.
He says you have explored loopholes in the Articles to take advantage?
What loophole is one exploring? The definition of Ashok Kapur to include successors is as loud and clear as could be possible. My father put all his wealth into this bank to promote it. Therefore, having participatory rights of promoters is not an alien concept. These Articles were approved by the RBI and are compliant in every way with the RBI guidelines and the Banking Regulation Act. My father was one of the most respected persons in the financial community. He co-promoted the bank. He put his sweat and wealth into promoting the bank. Even after his death, we complied with every regulatory requirement and have not sold our stake. We are the second largest shareholders in the bank. Rana Kapoor and his successors have the same rights as Ashok Kapur and his successors. What loophole are we exploring?
How do you read the verdict?
By this verdict, our rights have been recognised jointly with Rana uncle. Most importantly, we cannot be declassified from our status as promoter. I believe this judgment has also exposed the vacuity of Rana uncle’s claims of professionalism, corporate governance and transparency. However, I continue to feel this court battle could have been avoided had Rana uncle dealt with the matter with some dignity and grace, especially respecting the rights of his late partner who died tragically in the Mumbai terror attack. Frankly speaking, in a family fight, nobody is a winner.
What will be the fallout?
The order received from the high court and the documents which form part of the record have many findings which have serious repercussions on the corporate governance issues enshrined in Clause 49 of the Listing Agreement. To state only a few facts regarding declassification effort: Rana Kapoor wrote four letters from 2010 to the RBI behind our back to declassify us from the promoter status, whilst all along telling us to trust him. His letter to the RBI asserted that “since Ashok Kapur had passed away and since his heirs were not involved in the management of Yes Bank and did not sit on its board, Ashok Kapur’s share ownership could no longer be classified as promoter ownership.” This was curious logic. He would not take us on the board or allow us any participation in the bank, while representing to the RBI that because we are not on the board or involved in management, we should be declassified as promoter! And all this behind our back! Is this the real reason my nomination was rejected, which the court has described as “churlish and vindictive”. The applications to the RBI to this end are motivated, self-serving and prima facie unlawful. …. I must note that even before me, Rana Kapoor and Yes Bank went to great lengths to withhold these documents.
Kapoor says the court has directed the bank to change Articles of Association you rested your case on
Rana uncle’s interpretation that the high court has directed him to amend the Articles appears to be a deliberate misreading of the order. The judgment states that as the Articles stand, both the promoters and the successors of the promoters have joint rights. If you want to change them or regulate them, then you may amend the Articles or reduce your joint shareholding below 10%. These are options, not directions. However, this reinforces that Rana Kapoor would go to any extent to deny us our rights. Rana Kapoor seems singularly motivated to deny us our rights, even if it is at the cost of losing his very own rights, which he has been exercising till date. Does he feel he doesn’t need these rights anymore? Currently, he is at the helm of management; he may feel he can continue to navigate at his own terms forever even without exercising these rights. Well, he should think again. The position of MD and CEO has a limited tenure and is subject to the regulator’s approval. If what MR Srinivasan told me in 2013 had any grain of truth, then his appointment as MD and CEO was approved by RBI only on the last day. What is permanent though is his status as promoter. Without the rights, which go along with promotership, he may find it difficult to influence the management and may face problems.
Rana uncle claims to have no nominees on the board because the same nominees whom he once appointed are being converted into independent directors. Ravish Chopra was appointed as his nominee in 2013 and in 2014 was made an independent director. The same is the case with MR Srinivasan. In case of Ravish Chopra, the court observes, “To play ducks and drakes like this with director appointments is entirely impermissible.
Kapoor says this is a professional organisation, not a family estate...
Is this organisation so professional that you don’t pay homage to your late partner who tragically died in the terror attacks? Is the organisation so professional that you ring fence the copromoter family from the bank in totality? Is the organisation so professional that you blatantly hide facts from the family/court/Sebi/RBI? Is this truly a professional organisation and running like one or is it a one professional’s organisation?
How does nomination restrict or affect the Banking Regulation Act under section 10 and 5 where board of directors is fully empowered to make decisions? On the contrary, conduct of the organisation is not in consonance with all norms of corporate governance and transparency, which speaks volumes of the professionalism of the Bank.
He says you have explored loopholes in the Articles to take advantage?
What loophole is one exploring? The definition of Ashok Kapur to include successors is as loud and clear as could be possible. My father put all his wealth into this bank to promote it. Therefore, having participatory rights of promoters is not an alien concept. These Articles were approved by the RBI and are compliant in every way with the RBI guidelines and the Banking Regulation Act. My father was one of the most respected persons in the financial community. He co-promoted the bank. He put his sweat and wealth into promoting the bank. Even after his death, we complied with every regulatory requirement and have not sold our stake. We are the second largest shareholders in the bank. Rana Kapoor and his successors have the same rights as Ashok Kapur and his successors. What loophole are we exploring?
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