HC tells YES Bank promoters to settle dispute out of court
09 Apr 2014
The Bombay High Court on Tuesday directed YES Bank to seek an out-of-court settlement to resolve the dispute between its promoters Rana Kapoor and Madhu Kapur over the right to nominate 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.
Kapur is the widow of Ashok Kapur, who co-founded YES Bank along with his brother-in-law, Rana Kapoor. Madhu and Rana's wife, Bindu, are sisters. Ashok Kapur died in the Mumbai terrorist attack on 26 November 2008.
The high court bench asked both the parties to ''try and work out a solution'' within a week. The next hearing will be held on 15 April.
''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.
Last week, the mid-sized private bank had filed an appeal before a division bench of Bombay High Court challenging its 24 March ruling that it has the jurisdiction to hear the plea of Madhu Kapur.
YES Bank has requested a stay on the 24 March 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''.
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, M R 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, the nominee of Madhu Kapur, 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 13.72 per cent stake.
