Home / Financial News / Madhu Kapur accuses Rana Kapoor of misusing his post at YES Bank

Madhu Kapur accuses Rana Kapoor of misusing his post at YES Bank

Madhu Kapur, widow of YES Bank co-founder Ashok Kapur, and her two children – Shagun Kapur Gogia and Gaurav Kapur – have approached banking regulator Reserve Bank of India (RBI) accusing the private lender’s Managing Director and Chief Executive Officer Rana Kapoor of misusing his position.

The Kapur family claimed Rana Kapoor was using the bank’s resources to “directly and indirectly” deny them their right as co-promoter. Rana Kapoor had co-founded YES Bank with Ashok Kapur. Rana Kapoor’s wife, Bindu, and Madhu are sisters.

When contacted, YES Bank said in a statement, “The bank had in the past consistently maintained that as a matter of policy, it does not comment on matters pending before court, as the same has an effect of interfering with the administration of justice. Therefore, the bank is not commenting on the issues, except in terms that it reiterates its position as taken before the Hon’ble Bombay High Court. The same conclusively contest and rebuts the position placed by the Madhu Kapur. Hence, the allegations in this regard are strongly denied”.

Terming them defamatory allegations against the MD & CEO, the statement said, “The bank functions in a strongly-regulated sector, subject to the oversight of the Reserve Bank of India and the appointment of MD & CEO has been approved by RBI”.

“Any insinuation against the bank and its top management, at the behest of a motivated party, would be an attempt to leverage on the bank’s goodwill while defaming its name and goodwill,” the statement added.

Madhu and her children also requested the banking regulator not to permit selection of any person as chairman or managing director of YES Bank, unless the appointment is jointly recommended by the Rana Kapoor and the Kapur family.

“Mr Rana Kapoor is misusing his position as managing director of the bank. The resources of the bank are being used by Mr Rana Kapoor to directly and indirectly deny us our rights, including by using the bank and independent directors as a front to raise untenable preliminary objections…In view of the above, you are requested to give no approval to the appointment of any person as chairman or managing director of the bank, unless it is jointly recommended by Mr Rana Kapoor and is according to the articles of association,” Madhu Kapur and her children wrote in a letter addressed to one of the RBI deputy governors.

Business Standard has reviewed the contents of the letter. The post of YES Bank’s chairman and managing director will become vacant in June and August. While Rana Kapoor is the managing director, M R Srinivasan has been made the part-time chairman of the bank.

“You are requested, as the regulator of banks, to ensure that ethical and governance standards are duly maintained. You are also requested to ensure that the appointments made have due approval of the shareholders unlike in the case of the appointment of Mr Srinivasan as part-time chairman, with remuneration that was not even approved by the shareholders of the bank,” the Kapur family said. “Considering the circumstances, you are requested to give us opportunity to place before you material to show that Mr Rana Kapoor has not acted in the interest of the bank or in a manner befitting the position of a managing director of a public trust institution.”

YES Bank has so far maintained its stance of not considering Madhu Kapur as a co-promoter. The bank’s board at its last meeting did not change this stand reducing the scope for an out-of-court settlement.

YES Bank claims that banking is not a family business and “financial family successors” do not automatically become part of the promoter group of a bank due to regulatory criteria.

The Bombay High Court has adjourned the hearing on the dispute between Madhu Kapur and YES Bank until June 19, 2014.

15 comments

  1. Because of Rana Kapoor YES Bank has seen the golden days, keeping that in my mind he is most deserving person for CEO YES Bank and false allegations by Madhu Kapur cannot change our decision.

  2. Really? Do you actually think that a man who made YES Bank what it is today is not following ethical standards of governance? I don’t think so. Mrs.Madhu Kapur is trying to defame Mr.Rana Kapoor with all this.

  3. Totally disagree
    with Madhu Kapur. How could she do this? She’s trying to bring Yes Bank down.

  4. Financial Institutions should run by professionals. Making
    up fake stories won’t help you Ms. Madhu.

  5. Ms. Madhu’s gotta be kidding. Mr. Rana worked so hard to make the bank a success and he will make it more success.

  6. Everyone knows who is right and who is wrong. Madhu is fighting a useless fight.

  7. Madhu is bringing herself down by making up fake stories about Mr. Rana.

  8. Pritish Shroff

    What is most important right now for YES Bank is to keep the family matters aside and give more considerations to the reputation of the bank

  9. Deepankar Sharma

    YES Bank you are a national bank, so please take rational decision when it come to choosing the best for your bank and we all know Rana Kapoor is the best.

  10. Shilpi Dhingra

    Mr. Rana Kapur has been very effectively and efficiently been handling the public money and he deserves to be the CEO of YES Bank

  11. In the present case Madhu Kapur has no strong evidence to prove that Rana Kapoor is misusing his powers YES Bank else stop putting false allegations for her personal benefit.

  12. Mr.Rana Kapoor is a respectable man and so is
    the bank. The public has full faith in Mr.Rana Kapoor.

  13. Really? Do you actually think that a man who
    made YES Bank what it is today is not following ethical standards of governance?
    I don’t think so. Mrs.Madhu Kapur is trying to defame Mr.Rana Kapoor with all
    this.

  14. YES Bank claims that banking is not a family business and “financial family successors” do not automatically become part of the promoter group of a bank due to regulatory criteria.

    There has to be some sense in this. Why would the entire board side with Rana Kapoor and not MAdhu. Really woman don’t misuse the power of being a deceased partners wife.

  15. All the efforts with which Mr.Kapoor and his
    brother made YES Bank what it is today is being plainly killed by Mrs.Madhu
    Kapur. Sad day in history.

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