YES bank-Kapur's heirs eligible to nominate directors
In the suit filed against YES bank by Madhu Kapur, the widow of YES bank's co-founder Ashok Kapur, the Bombay High Court passed an order saying that the bank must confer upon Ashok Kapur's heirs, the right to nominate Directors on the Board. The court invalidated the appointments of 7 individuals on the Board of Directors, four of whom are still serving.
YES bank was founded in 2004 by Rana Kapoor and Ashok Kapur. Rana Kapoor is the Managing Director and CEO of the bank. The late Ashok Kapur was the non-Executive chairman until his demise in 2008.
Alleging that Rana Kapoor deprived her and her children of their rightful place in YES bank's management, Madhu Kapur filed a suit in the Bombay High court. She sought that the decisions taken at the AGM should not be executed since the names of the three new Directors were not discussed with her. Her husband Ashok Kapur died in the 26/11 Mumbai terrorist attacks.
Madhu Kapur filed an amended petition in the High court questioning the appointment of the 6 Directors on the YES bank board. Madhu's daughter Shagun was refused entry into the boards on grounds of merit. She made a lot of disclosures while applying for the position. The amended petition questioned why such process was not followed in the case of the other appointed Directors.
The Bombay high court said that Madhu Kapur and Rana Kapoor should amicably resolve the dispute regarding Madhu's right to nominate Directors on YES bank's board. The two-judge bench had asked both the parties to "try and work out a solution". "It's not right for us to decide on this issue after what they (Kapur's family) have gone through," said one of the judges.
Madhu Kapur holds 10.29% shares in YES bank jointly with her children, while Rana Kapoor and his entities hold 11.77%
The Bombay High court had arrived at a final order in the legal battle between Madhu Kapur and Rana Kapoor. The order however was not made public and will remain so until another round of mediation was concluded between the disputing parties. The media was kept out of the court room when parts of the judgement were read.