The two-year-old court battle between two of YES Bank promoters -- Rana Kapoor, CEO and managing director, and the largest shareholder and founder, and Madhu Kapur, widow of the bank's other founding member Ashok Kapur -- may come to end today (May 13) with the court likely to pass the final order in the case.
The case came up for hearing on May 12 in the Court No. 37 of the high court but the judge Gautam Patel asked the media to leave the courtroom, allowing a demand by one of the parties so that the media is not privy to the proceedings. Two journalists who were sitting inside the court room left the room and the proceedings were underway behind closed doors.
When the case came up after hearing on May 7, the court observed the rights of Madhu Kapur and Rana Kapoor to jointly nominate directors on the board. The order was deferred to May 12 but the media was kept out of the court room on the request of YES Bank.
At the end of March 31, 2015, Rana Kapoor, managing director & CEO of YES Bank owned 11.77% stake in the bank, whereas Kapur and family owned 10.29%.
During the proceedings on May 7, the judge had asked two promoters to consider a reduction in their stakes to below 10%. If the shareholding is brought to this limit, a conflict over the nomination of an Indian partner representative director will be resolved, as both sides will end up forfeiting their rights.
Ashok Kapur had co-founded the bank with his brother-in-law Rana Kapoor. Madhu Kapur and Rana Kapoor's wife Bindu are sisters.
Madhu Kapur had contested YES Bank's appointment of the three executive directors on the bank's board and also the independent directors, claiming it had gone against the articles of association of the bank.
In an amendment to her earlier civil suit filed in July 2013, Madhu Kapur reaffirmed her right and requested the court to desist from accepting any nominations under Article 110 (b) of the articles of association of the bank unless they were jointly exercised by both the Indian partners, the Rana Kapur group and the Madhu Kapur group, who had above 10% shareholding in the bank.
Madhu Kapur and her daughter Shagun Gogia have stated that being wife and children of Ashok Kapur, they are legal heirs and successors of Ashok Kapur and that Ashok Kapur and Rana Kapur are not relatives under the Companies Act or under the Banking Regulation Act.
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