Yes Bank board spurns Shagun’s application for board position

The board's decision was taken at its June 27 meeting,which was convened as per an order of the Bombay High Court.

Written by PTI | Mumbai | Published: June 29, 2013 8:20 pm

Private sector lender Yes Bank’s board has declined to nominate Shagun Gogia as a nominee director,a development that is set to prolong the bitter tussle between the promoter families.

Gogia is the daughter of bank co-founder Ashok Kapur,who was killed in the November 2008 terror attacks on the city. She was nominated by her mother Madhu Kapur as the legal heir to her deceased husband’s 12 per cent stake in the bank.

The board’s decision was taken at its June 27 meeting,which was convened as per an order of the Bombay High Court.

“The board of directors has unanimously agreed that the recommendation of Shagun Gogia made by you should not be accepted,” the bank said in a letter addressed to Madhu.

When contacted,the bank’s spokesperson refused to comment saying “the matter is subjudice”.

The letter says the submissions made in support of Gogia’s candidature were extensively deliberated by the board “in accordance with the terms of Reserve Bank prescriptions” and after considering the composition of the past and current board of the bank.

“The Board also evaluated the submissions considering the past and current composition and profile of the Board of the Bank,and current composition of the Boards peer bank (Kotak Mahindra Bank) and the three largest private banks,” the letter said.

Yes Bank,among the last banks to start operations,was founded by Kapur and Rana Kapoor,who is married to Madhu’s younger sister Bindu. Kapoor is the managing director and chief executive of the bank now.

The letter adds that Kapoor recused himself from the deliberations surrounding this issue both at the nominations and governance committee meeting and then at the overall board level.

After the board meeting on Thursday,the bank had issued a statement saying it would inform the Bombay High Court about the outcome of the board meeting as the matter is sub-judice.

Gogia had sought a board seat in 2009 but was rejected by the board fearing she would not pass muster with the”fit and proper” criteria set by RBI.

Madhu had on June 6,two days before the bank’s AGM,moved the Bombay High Court against the appointment of Diwan Arun Nanda,Ravish Chopra and MR Srinivasan on the board and sought a stay on the June 8 AGM.

The court dismissed the plea of Madhu to stay the AGM,but had asked the board to advance its July 22 meeting to June 27 to consider Gogia’s application for a board seat. The next date of hearing is July 1.

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