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Monday, August 12, 2013

Yes Bank case: Madhu Kapur to continue legal battle

Madhu Kapur, co-promoter in Yes Bank, will continue to pursue the legal battle against the bank seeking participatory rights in the nomination of directors on the bank’s board.

Lawyers of Madhu Kapur, widow of Yes Bank co-founder Ashok Kapur, today replied to the Bombay High Court on the possibility of an out-of-court settlement of the over two-month-old legal family dispute.

Madhu Kapur’s sister, Bindu Kapoor, is married to Yes Bank’s current CEO and Managing Director, Rana Kapoor.

Madhu Kapur moved court in June seeking rights to nominate directors as an Indian Partner on the board. Kapur has challenged the appointment of three directors Diwan Arun Nanada, Ravish Chopra and M. R. Srinivasan. However, Yes Bank and its CEO and Managing Director Rana Kapoor have refused to accept her demands citing the Articles of Association of the bank that restrict the rights to the Indian Partner only (and not his/her successors).

The bank had also rejected nomination of Madhu Kapur’s daughter Shagun Gogia as an independent director on the grounds of not meeting the Reserve Bank of India’s guidelines, maintaining the rejection was purely professional. However, Madhu Kapur has contested the rejection.

On July 15, the High Court accepted an amended petition by Madhu Kapur that opposed the appointment of three directors to the Yes Bank board and seeking the right to nominate Shagun Gogia as a director.

Madhu Kapur’s lawyers, on July 29, filed an affidavit that also raised corporate governance issues at Yes Bank in the recent appointment of three more directors on its board. They said the appointment of all six directors is illegal.

However, the bank has maintained that it is professionally run and further under the Banking Regulation’s Act, no court can question a board’s decision.

The case was partly heard today from the Madhu Kapur's side. The next hearing is on Tuesday.

Source: thehindubusinessline


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