Mumbai: The sparring promoters of Yes Bank are inching towards a truce, but there was no clarity late on Tuesday over the exact status of the talks with one camp claiming it’s at an advanced stage and the other being not on the same page. Sources close to Rana Kapoor on Tuesday evening claimed that settlement talks are at an “advanced stage” with the draft consent terms under discussion which speaks of recognising both the groups as “equals”, while the Madhu Kapur family maintaining that the “discussions are still on”.
“It is an over five-year-old battle and it will take time for a consensus to emerge. We are not anywhere near a consensus now,” sources close to the Madhu Kapur family said on Tuesday. Rana Kapoor, the managing director and chief executive till an RBI-mandated January 31, 2019 deadline, and the entities linked to his family own 10.7 per cent in the private sector bank, while Madhu Kapur, the widow of the founder chairman and the victim of the 26/11 terror attack Ashok Kapur, owns 9.8 per cent.
The developments come within hours of a rating downgrade by global rating agency Moody’s Investors Service citing concerns on corporate governance and a fortnight ahead of the crucial board meeting on December 13, which may recommend a new CEO and non-executive chairman.
According to sources close to Kapoor, whose new-three-year term was curtailed by RBI in mid-September, progress has been made following an “exchange of notes” last Thursday with Madhu Kapur. Ten specific pointers have been exchanged, they add.
They also say the agreement will include withdrawal of counter-suits filed by both the parties against each other in the Bombay High Court. But the Madhu Kapur camp has denied any such development saying, “consent terms will have to be finalised first and placed before the court, only after that the suits can be withdrawn.”
The finer points of a possible pact are being discussed right now in details, they said and explained that the issue of voting at the December 13 board meet can happen only if an agreement is reached by then. The board meeting may also decide on crucial appointments, including recommending a non-executive chairman and three non-executive directors to fill the vacancies created by the resignations in recent past.
If the agreement goes through, it will end a decade-old rivalry between the two promoter families which began after the tragic death of Ashok Kapur in the 26/11 attacks. The matter reached the Bombay High Court early 2012, after Kapoor contested the eligibility of Madhu Kapur being a promoter and the court ruled in her favour. He had also removed her name from the list of promoters in the annual report for that year.
Sources say as part of the “equal rights” framework, both the parties will jointly recommend the non-executive chairman as well as the managing director and chief executive apart from nominating one board member each and a third non-executive director jointly.
The bank had last week officially admitted that the promoters were in talks for a settlement. The talks had reportedly been initiated by Kapoor himself after the RBI turned a second request by the board for a re-look at his continuance in the bank beyond January 31. Since mid-September, when the RBI asked Kapoor to leave the bank on January 31, 2019, Yes Bank stock has lost 55 percent of its value. In two trading days alone after the RBI writ, the stock tanked over 40 percent.
Kapoor was the second top executive at a private sector lender after Axis Bank’s Shikha Sharma to face a the ire of the regulator and lose the job. Though no official reasons were specified for the action, both the lenders were found to have under-reported their non-performing assets by over Rs 10,000 crore each for two consecutive financial years ending FY17.
