From left: Rana Kapoor and Madhu Kapur. Illustration: Ajay Mohanty
promoters Rana Kapoor
and Madhu Kapur both seem keen to settle differences to protect their organisation’s as well as their own interests. The stock of the bank has plummeted since the Reserve Bank of India
(RBI) asked Kapoor to exit as chief executive officer (CEO) by January 2019.
“If our rights are recognised, there is no need to continue fighting,” said a source close to Madhu Kapur, wife of late Ashok Kapur, a co-promoter of the bank.
How might the issue be settled and who made the first reconciliatory move? The stories differ in the two camps.
There is no legal case pending between the two parties, except Rana Kapoor's appeal to refer Bombay High Court's 2015 ruling, empowering Madhu Kapur to have a say on board appointments, over to a division bench is still to be admitted by the Court.
Sources on Madhu Kapur’s side said YES Bank’s Senior Group President Rajat Monga approached her daughter Shagun Gogia Kapur. The meeting hasn’t taken place yet, said a source.
Rana Kapoor’s camp, however, said that reconciliation talks were on for some time between the three sisters — Madhu Kapur, Bindu Kapoor (Rana’s wife), and Indu Kapur, who is acting as a mediator.
Negotiations to begin
Kapoor and Kapur both are willing to settle differences
No formal talks have begun
Sources say three Kapur sisters, Madhu, Bindu and Indu, have initiated the talks
Madhu Kapur’s camp willing to settle if rights are recognised
From YES Bank’s side Rajat Monga offered a talk
Meeting between Monga and Shagun Gogia yet to take place
As promoters, Rana Kapoor
and his family own 10.66 per cent in the bank as of June 2018. Rana Kapoor
individually owns 4.34 per cent. His three daughters — Raakhe Kapoor Tandon, Radha Kapoor Khanna and Roshni Kapoor — are directors of holding companies, YES Capital and Morgan Credits, which own 3.28 per cent and 3.05 per cent, respectively, in the bank.
Without reconciling with Madhu Kapur, who holds 9.28 per cent of the bank’s shares, new board members cannot be appointed under a new dispensation.
recently proposed to elevate senior leaders Monga and Pralay Mondal as executive directors, but without Madhu Kapur’s nod, the appointments won’t be valid, according to a Bombay High Court
ruling in 2015. A similar appointment proposal was struck down by the court earlier.
Now, with Rana Kapoor himself likely to go, it is imperative that the two promoter groups come together to give stability to the bank and protect their own interest by stopping the stock slide.
In a letter to the board on September 28, Madhu Kapur wrote: “Considering our vested rights as co-promoters and Indian partners enshrined in the bank’s articles of association, you will appreciate that a constructive and consultative positive approach including in the appointment of whole-time directors, will go a long way in providing comfort to all stakeholders amidst the escalating uncertainty.”
Madhu Kapur’s camp maintains that Rana Kapoor has not reached out himself. But, sources in the Rana Kapoor camp said he had indeed reached out for a settlement.
The stock market reaction to talks of a reconciliation certainly indicated that investors wanted the issue to end.
From Rs 319.20 a piece on September 19, the stock plummeted to Rs 226.50 apiece on September 21. It fell to Rs 183.65 apiece, but started recovering after the bank said it was forming a committee to search for Rana Kapoor’s successor.
After news of reconciliation between the promoters, the stock has risen from its Friday’s close of Rs 203.95 apiece to Rs 225.45 on Tuesday.