Yes Bank’s Co-Founders Bury The Hatchet After A Decade-Long Feud
The two co-founding families of Yes Bank Ltd.—one of India’s youngest private lenders—have resolved differences after nearly a decade-long dispute, as the lender prepares to transition towards a new leadership.
In a statement to stock exchanges, the bank said that two promoter groups would nominate one representative director each to join the bank’s board.
Madhu Kapur Group and Rana Kapoor Group have agreed to nominate one Representative Director each on the Bank’s Board, subject to the completion of the necessary documentation. The two new appointed Directors will be announced at the next scheduled Board meeting in April, 2019.Yes Bank Statement
This is intended to ensure better coordination and support by the two promoter groups to the new chief executive officer, the statement added. Ravneet Gill is scheduled to take over as the bank’s CEO by March 2019 after Rana Kapoor was denied an extension by the Reserve Bank of India.
As per the bank’s Articles of Association, the two Indian partners—late Ashok Kapur and Rana Kapoor—had joint nomination rights for three board seats. The bank’s notification suggests that the two sides have agreed to split those nomination rights over two of the seats. Discussions on whether the third nominee would be selected by the two sides in rotation or by consensus are still underway.
The two sides came to this settlement to ensure that the fight doesn't extend too far, said a person familiar with the discussions. Madhu Kapur will file consent terms with the court for approval and to enforce their rights as co-promoters, this person said.
It is not clear whether Rana Kapoor would chose to remain on the board himself as a nominee director, even though the current agreement between the two promoters would allow for it. Equally, the Madhu Kapur side could chose to either nominate a family member or an external representative.
Shagun Gogia, daughter of late Ashok Kapur, declined to comment.
Rana Kapoor will complete his term as CEO at the end of this month. However, since Gill only joins in March, the bank will put an interim arrangement in place.
“The Board has today approved and recommended to the RBI for its approval, a senior Board Director for temporarily holding the office as 'Board Director on Interim Special Duty (MD & CEO's responsibilities)' from Feb. 1, 2019 till such date Mr. Ravneet Gill assumes office in March, 2019,” the bank said in a statement.