Rana Kapoor has drawn up a draft proposal for discussion between Madhu Kapur and him, which could potentially result in their reconciliation.
The draft proposal, which CNBC-TV18 has reviewed, has laid out the terms of appointment of directors, a vital bone of contention between the promoters.
In 2015, Kapur had won a ruling from the Bombay High Court that gave her right to jointly nominate directors to the board of Yes Bank. Kapoor had challenged the ruling.
If the conditions of the draft proposal are met, Kapoor has offered to withdraw to drop his plea against Kapur, said people familiar with the matter. They did not want to be named.
Yes Bank and Kapur’s daughter Shagun Gogia did not comment for the article.
Appointment Of Directors
The draft proposal stipulates that as long as both the Indian partners — Kapur and Kapoor — along with their affiliates, each hold at least ten percent of the issued and paid-up capital of Yes Bank, they would have the right to recommend the appointment of three directors on the board of the bank.
It states that each Indian partner will accept the director nominated by the other Indian partner subject to approval by the Nomination and Remuneration Committee as well as the board of directors, and this director would not be liable to retire by rotations. The third director, according to the draft, would be jointly recommended for appointment to the board by both the promoters.
The proposal said the nominee director appointed by the Kapur family would be non-independent and non-executive at all times, as will the director appointed by Kapoor.
But in the case where Kapoor’s own appointment is approved by RBI and shareholders of Yes Bank in the capacity of either MD and CEO or non-executive chairman or a non-executive director, he will be on its board as a non-independent executive director.
In such a scenario, where Kapoor is appointed MD and CEO or chairman, Kapur’s consent would be deemed to have been given at all times.
The draft also said both the Indian promoters would have the right to jointly recommend the name of chairman, MD and CEO of Yes Bank, and also be entitled to make recommendations to the board for the induction of whole-time directors, subject to necessary approvals.
Rana Kapoor found Yes Bank with his brother-in-law and colleague Ashok Kapur. Kapur died in the 2008 Mumbai terrorist attack. In 2013, Kapur’s wife Madhu, who inherited his stake, dragged the bank to court demanding equal voting rights to nominate a director on the board.
The proposals created by Yes Bank for resolving the differences between the promoters are merely draft terms that have been drawn up for discussion, said one of the people quoted above. The final terms for settlement would have to be agreed upon by both the parties, the person said.
The board of Yes Bank is set to meet on December 13 to appoint two new independent directors to the board. Three directors — R Chandrashekhar, Ashok Chawla and Vasant Gujarathi — recently resigned.