Yes Bank gets hammered
On the BSE, the Yes Bank scrip settled at 6.03 per cent lower at Rs 42.10
- Published 14.01.20, 12:44 AM
- Updated 14.01.20, 12:44 AM
- a min read
Fresh uncertainty over its capital-raising plan amid the resignation of an independent director sent the shares of Yes Bank crashing over 6 per cent on Monday.
On the BSE, the Yes Bank scrip settled 6.03 per cent lower at Rs 42.10. The counter has been under pressure since October 2018 after the RBI did not extend the tenure of former CEO Rana Kapoor. Since then, the share’s value has fallen over 35 per cent.
In recent times, apprehensions over its capital raising plans have kept the stock on a slippery path.
Last Friday, independent director Uttam Prakash Agarwal had resigned from the board and stepped down as the head of the private bank’s audit committee, citing major corporate governance concerns.
Agarwal’s resignation letter, which was shared by the bank, said he had “serious concerns” about the “deteriorating standards of corporate governance, failure of compliance, management practices and the manner in which the state of affairs” are being conducted by the bank under its current CEO Ravneet Gill.
Yes Bank said the observations made by Agarwal on the bank’s governance will be duly examined by the board.
In a letter to Sebi, Agarwal has reportedly listed out his concerns on non-disclosure and the reluctance shown by Gill in informing the board of the names of the interested investors in the fund-raising exercise and inconsistencies in what he informed the board and what appeared in the media.
He further alleged that Gill had to be reminded repeatedly about sharing information on the capital-raising plans and the term sheets he eventually shared lacked essential details, and that the expressions of interest submitted by the three domestic investors were called as commitments.
Yes Bank had said in a statement that it was reviewing if Agarwal complied with the RBI’s “fit and proper” framework and had also obtained opinion from legal experts on the same.
Cash plan trimmed
At Friday’s board meeting, the directors also scaled down the bank’s capital raising plan.
Yes Bank had earlier announced that it intended to mobilise $2 billion for which it had received offers from institutional investors and family offices. However, at its January 10 board meeting, the directors approved a fresh round of capital raising of Rs 10,000 crore, for which it will seek shareholders’ approval.