Yes Bank: M Damodaran, Anil Singhvi On Audit Committee Chairman’s Resignation
Quick action needs to be taken to address governance concerns at Yes Bank, say regulatory and governance experts.
Yes Bank Ltd.’s Audit Committee Chairman Uttam Prakash Agarwal resigned today citing corporate governance issues at the lender. Agarwal was appointed independent director in November 2018, at a time when Yes Bank was still managed by founder Rana Kapoor. Agarwal, a former ICAI president, was appointed for a five-year term.
This is what his resignation letter states:
“There are serious concerns as regards deteriorating standards of the corporate governance, failure of compliance, management practices and the manner in which the state of affairs of the company are being conducted by Ravneet Gill - MD/CEO, Rajiv Uberoi - senior group president governance & controls, Sanjay Nambiar - legal head and board of directors. I have raised my concerns on these very critical matters from time to time in the overall interest of Yes Bank.
And millions of its small and large depositors, investors, shareholders and all other stakeholders.i have left no stone unturned to discharge my duties and thus wrote a letter detailing all these matters in the attached letter dated 9th January, 2020 (which is submitted to all the regulatory authorities).”
Yes Bank offered no immediate comment on the resignation. Its board was holding a previously scheduled meeting today to discuss fundraising.
It was only a few hours after the resignation letter was filed with the Registrar of Companies that Yes Bank issued a statement to the stock exchanges.
It said:
“In his resignation letter Mr. Agarwal has made certain observations on the Bank's governance and the same shall be duly examined by the Board. In this regard, the Bank would like to further intimate that the Bank was reviewing the 'fit and proper' status of Mr. Agarwal as directed by the Reserve Bank of India. In this respect, the Bank had obtained legal opinions from eminent jurists. These opinions were to be considered by the Nomination and Remuneration Committee of the Board (NRC)/the Board of the Bank in their meetings scheduled for today, i.e., January 10, 2020. However, prior to the commencement of the proceedings of these meetings, the Bank received resignation of Mr. Agarwal. The NRC and the Board have taken on record Mr. Agarwal's resignation.”
Former SEBI Chairman M Damodaran and Anil Singhvi, founder of governance advisory firm IiAS, discussed the implications of Agarwal’s resignation on a special show on BloombergQuint.
Watch the entire conversation here: