YES Bank says no to Shagun's nomination, again

The board of YES Bank last week reiterated its decision made four years back on directorship of Shagun Gogia Kapur, thereby declining her nomination request.

So what was different this time?

The managing director and CEO of the bank, Rana Kapoor chose to stay away from the meeting when the decision was taken. Going by sources, Kapoor voluntarily recused himself when the matter was being considered in the nominations and governance meeting and in the subsequent meeting of the board of directors.

In a letter sent to Madhu Kapur, Shagun’s mother and late founder Ashok Kapur’s wife, who backed her daughter’s nomination, the bank said the board of directors has unanimously agreed that the recommendation of Shagun Gogia should not be accepted.

Madhu Kapur currently holds about 12% stake in the bank, inherited from Ashok Kapur, who died in the 26/11 Mumbai terror attacks. On June 4, she had written to Rana Kapoor demanding that her daughter Shagun Gogia be inducted into the board and that three other approved directors — Diwan Arun Nanda, Ravish Chopra and M R Srinivasan — be prevented from being appointed. On June 6, she moved Bombay High Court on the same issue.

On June 7, Bombay High Court had directed YES Bank to consider the nomination of Gogia in a board meeting to be held on June 27.

The board at its meeting cleared the nominations of three other top executives — Rajat Monga, Sanjay Palve and Pralay Mondal — for board directorship and communicated the decision to BSE. However, it did not announce the decision on Gogia citing legal constraints. “As the matter is sub-judice, the final decision of the board of directors of YES Bank on the subject will be submitted to the Honourable Bombay High Court at its scheduled hearing on July 1, 2013 as per the court order,” the bank said in a statement.

The board in its letter to Madhu Kapur said the decision to reject Gogia’s nomination was taken after reviewing the past and current composition of boards of peer Kotak Mahindra Bank and three top private banks. The letter said the board had also reviewed Gogia’s submission in accordance with norms laid down by the Reserve Bank of India.

Contacted, a YES Bank spokesperson declined to comment on the issue.
The tug of war between Rana Kapoor and Madhu Kapur has seen YES Bank shares lose 5.4% just in June, compared with a 1.84% decline for the Sensex.