The Bombay High Court on Tuesday directed YES Bank to go for an out of court settlement to resolve the dispute between its promoters relating to nomination of directors on the bank’s board.
Rana Kapoor, Chief Executive Officer and Managing Director of YES Bank Ltd, and co-promoter Madhu Kapur are stuck in a legal family dispute since June last year on Madhu Kapur’s right to nominate a director on its boards, which has been rejected by the bank’s board previously.
A two-judge Bench asked both the parties on Tuesday to “try and work out a solution” within a week. The next hearing will be held on April 15.
Kapur is the widow of Ashok Kapur, one of the promoters of YES Bank along with Rana Kapoor. Rana Kapoor’s wife Bindu Kapoor and Madhu Kapur are sisters. Ashok Kapur died on November 26, 2008 in the Mumbai terrorist attack.
“It’s not right for us to decide on this issue after what they (Kapur’s family) have gone through,” said one of the judges. The judge also termed the application as an emotional one for them too, according to a person in the know.
Last week, the mid-sized private bank had filed an appeal before a division bench of Bombay High Court, challenging the court’s March 24 ruling that it has the jurisdiction to hear the plea of Madhu Kapur.
YES Bank has also requested a stay on the March 24 order that the case will henceforth be heard on its merits. This overruled YES Bank’s contention that Kapur’s plea “is not maintainable and should be dismissed”.
According to the person in the know of the development, on Tuesday, Aspi Chinoy, senior counsel representing Madhu Kapur, and Rana Kapoor’s lawyer Soli Cooper, agreed to call for a meeting of both the parties once again to negotiate a settlement.
Madhu Kapur, along with her son Gaurav Kapur and Shagun Gogia, took Rana Kapoor and YES Bank to court in June 2013, demanding the right to nominate a director on the bank’s board, citing the articles of association of the bank.
Kapur had also filed a plea opposing the appointment of three directors (Arun Diwan Nanda, MR Srinivasan and Ravish Chopra) nominated by Rana Kapoor.
However, YES Bank contested it saying the directors of the bank were elected by shareholders.
YES Bank has refused a board seat to Gogia, on behalf of Madhu Kapur as a co-promoter, citing that she does not have enough experience and was not ‘fit and proper’ to be a board member.
Madhu Kapur holds 12 per cent stake in the bank while Rana Kapoor, directly and through other family-owned firms, holds a 13.72 per cent stake.