YES Banks Promoters Reach Truce; To Nominate One Director Each On Board

In a clear signal that YES Bank promoters have buried the hatchet, Rana Kapoor and Madhu Kapur have decided to nominate one representative director each on the lender’s board.

The bank’s board, which met on Tuesday to finalise a transition plan for the new MD and CEO Ravneet Gill, also approved and recommended to the RBI a senior board director to temporarily hold office as ‘Board Director on Interim Special Duty’ from February 1 until Gill joins in March.

Sources said that Ajai Kumar, non-executive, non-independent director of YES Bank, is likely to be appointed as the interim MD and CEO, based on the RBI’s approval.

Meanwhile, the truce between the promoter groups comes years after they fell out.

“This is intended to ensure better coordination and support by the two promoter groups with the new Managing Director and CEO and the board of directors of the bank,” the private sector lender said, adding that the two new directors will be announced at the next board meeting in April.

Talks between the two groups started after the RBI cut short Kapoor’s term and asked him to step down after January 31.

“Efforts were under way for mutual resolution and truce between Rana Kapoor Group and Madhu Kapur and family. Recently, select senior board of directors of the bank had also interacted with Madhu Kapur and family,” YES Bank said.

The names of the representative directors are understood to be still under discussion. Kapoor, along with Madhu Kapur’s husband Ashok Kapur, founded YES Bank in 2003. While Ashok Kapur was the Chairman, Rana Kapoor was the MD and CEO. But after Kapur passed away in 2008 in the Mumbai terror attacks, disagreements started with the board rejecting a proposal by Madhu Kapur to nominate her daughter Shagun Gogia on the board.

Among the bank’s promoter groups, Kapoor has a 4.32 per cent stake, while Madhu Kapur, wife of Ashok Kapur, has 7.58 per cent equity as on December 31, 2018. YES Capital India Pvt Ltd has 3.27 per cent equity, Morgan Credits Private Ltd has another 3.04 stake, and Mags Finvest Private Ltd holds 1.61 per cent stake in the bank.

YES Bank shares fell 2.43 per cent and ended at ₹202.60 on the BSE.