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Monday, July 1, 2013

YES Bank Row: No end in sight, Madhu Kapur, Shagun Gogia looking for more than just a board position

YES Bank's four-year-old family feud that spilled over to streets may play out in courts for a long time as Madhu Kapur prepares for a prolonged battle to establish her claim as an equal business partner to Managing Director and Chief Executive Rana Kapoor.

"This will be a long drawn court battle,'' said a legal advisor to Madhu Kapur after her daughter's nomination was rejected. "Madhu and the family are aware of it. They are fighting for joint nomination rights along with Rana, and not just a board seat for Shagun,'' said the person who did not want to be identified because of the legal issues involved.

Madhu is the widow of bank co-promoter Ashok Kapur who was killed during 2008 Mumbai terrorists attack on Oberoi Hotel.

YES Bank last week dismissed Madhu Kapur's daughter Shagun Gogia's nomination to the board of directors as the legal heir of one of the two founders. It said it was not in line with practice at other institutions such as ICICI Bank, HDFC Bank, and family-promoted Kotak Mahindra Bank. The Bombay High Court directed the bank to consider Kapur's nomination after the family challenged the nomination of two directors by co-founder Rana Kapoor.

The late Ashok Kapur family also sought the stay of the appointment of the third director. The court will be informed today of the board's decision and Madhu could file an affidavit challenging the validity of the nominations of Ravish Chopra, a former HSBC banker and former Reserve Bank of India staffer MR Srinivasan on the board of the private lender by Kapoor.

The articles of association of the bank provides for joint nomination by Rana and his late partner Ashok Kapur. "The Board evaluated the submissions considering the past and current composition and profile of the Board of the bank, the current composition of the boards peer banks Kotak Mahindra Bank and the three largest private sector bank,'' Yes Bank's company secretary wrote to Madhu Kapur.

"Based on the above and after extensive deliberations, the board of directors has unanimously agreed to that the recommendation of Mrs Shagun Gogia made by you should not be accepted.'' The bank will formally announce its decision, taken with Rana Kapoor abstaining from the deliberations on Thursday's meeting, to the Bombay High Court on Monday. The Kapurs moved the court on June 6 against the appointment of Diwan Arun Nanda of advertising company Rediffusion. The court then directed the bank to advance its board meeting by a month to discuss Ms Gogia's candidature.

Source: EconomicTimes


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