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Court blow to Yes Bank board move

Mumbai, March 24: Bombay High Court today admitted a plea by Madhu Kapur challenging the appointment of three directors on the board of Yes Bank.

Madhu Kapur is the widow of Ashok Kapur who founded the private sector bank along with Rana Kapoor.

Yes Bank has maintained that according to Section 10A (6) of the Banking Regulation Act, 1949, any dispute over appointment of directors cannot be heard by a court. However, Bombay High Court felt that the bar was not applicable in this case.

“Bombay High Court has just held that bar on its jurisdiction under Section 10A (6) of the Banking Regulation Act, 1949 is not applicable to the present case, and will now hear the case on merits. Yes Bank awaits full text of the said order,” senior advocate Soli Cooper said.

It may be recalled that the Yes Bank board had declined a request made by Madhu Kapur to induct her daughter Shagun Gogia as a member on the board in 2009, as it felt that the appointment will not fulfil the fit-and-proper criteria of the Reserve Bank of India.

Kapur has challenged the appointment of three directors — M.R. Srinivasan, Diwan Arun Nanda and Ravish Chopra — saying that she was not consulted prior to their appointment despite being a co-promoter of the private sector lender.

Madhu Kapur has a 12 per cent stake in the bank while Rana Kapoor owns 13.7 per cent.

The Kapur family and Yes Bank were engaged in a legal dispute over the former’s right to seek a nomination on the bank’s board. While Gogia claims she has the right because of her status as legal heir, the bank argued that she might not pass muster on RBI’s fit and proper criterion for bank directorship.

 
 
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