 "Rana uncle has made this a modern-day Mahabharat: Shagun Gogia")
With the two-year-long legal battle between the two largest promoters of YES Bank coming to an end, Shagun Kapur Gogia, daughter of late Ashok Kapur who co-founded YES Bank, says she feels vindicated. In an interview to Nupur Anand, she says that Rana Kapoor, the managing director and chief executive of YES Bank, could have had handled the issue more gracefully instead of turning it into a modern-day Mahabharat. Edited excerpts:
While the Bombay High Court said YES Bank board appointments should be made jointly by promoters, it has ruled out your appointment as board member. How do you see the verdict?
We are very happy with the judgment as our rights have been recognised as joint with Rana uncle. Most importantly, we cannot be declassified from our promoter status. The court has passed orders preventing Rana Kapoor and YES Bank from even making such applications to the RBI (Reserve Bank of India). Further, seven directors have been unseated. At a personal level, I feel Rana uncle could have handled this with more dignity and grace, especially to respect the rights of his late partner who died tragically in the Mumbai terror attack. Rana uncle has made this a modern-day Mahabharat.
Rana Kapoor said he will change the Articles of Association. Do you think he is in no mood to go ahead with joint nomination? What is your plan under such circumstances?
I cannot judge his mood. I made that judgement many times in the past and was proved wrong by him. If he wants to change the articles to deny us our rights, there wouldn't be anything new or alarming he would be doing. He has done it over the past seven years and will be doing it again. Till date, he has been nominating unilaterally and exercising the very same rights under the very same articles. Now that the court has ordered these rights are joint; suddenly the articles need to be updated to reflect today's reality.
Our trust was broken time and again. What does that tell you of his intent? Why is he fighting joint nominations so hard? Does he fear a negative voice on the board? My father was one of the most respected persons in the financial community. He co-promoted the bank. He put his sweat and wealth into promoting it. Even after his death we have not sold our stake. We are the second-largest shareholders in the bank. Why will we not act? Are we not capable of acting in the best interest of the bank? I have no idea why or how one nominee on a board comprising up to 15 directors can make such a difference to Rana Kapoor. In today's world of transparency, that only raises doubts.
Do you think your battle to get rights has ended with the verdict or is it still a long way to go?
I feel we have been vindicated. We fought the battle on the grounds that we were denied our rights as per the Articles of Association. Rana Kapoor argued that these rights were personal to him and only he had the right to nominate. As I said, till date he has been unilaterally exercising the same rights as per the articles. Now, he will need our consent in those very nominations.
We have been classified as promoters and successors of my late father. Rana uncle cannot be writing behind our back anymore to declassify us. If you are a non-promoter in a bank, you have to bring down your shareholding to below five per cent. Was his intention for us to sell out? Even in this matter, the court observes: "The applications to the RBI to this end are motivated, self serving and prima facie unlawful…" I must note that even before me, Rana Kapoor and YES Bank went to great lengths to withhold these documents.
You have said there are governance and transparency issues in the way the bank has been functioning. Why do you say that?
There are many examples to the above. The list is endless. To state a few:
The first example being the application made to the RBI in 2012 for the appointment of Rana Kapoor as MD was not complete. The bank cited article 127(b) in its application as the component authority to make that appointment but only annexed 127(a) and 127(c) in its application to the RBI. Is this mere oversight in such an important application? Of course 127(b) talks about this appointment being a joint nomination of the promoters.
As you can see, multiple self-serving letters to declassify us were written to the RBI behind our back. When those letters concern our status it is only correct to keep us informed so we may have a say. If there is so much transparency why does one need to get a court order to see these letters?
The bank stated that in 2009, we made requests for nomination of my mother and S L Kapur (nobody related to us), the chairman at the time, chaired that discussion at the board. The bank claimed that nomination was rejected in 2009. If that was the case, why were they not able to produce any nomination papers in court? Because there was no nomination made. Is this transparency?
Rana Kapoor will continue to be the MD & CEO of the bank. How comfortable are you with this?
We objected to Rana Kapoor's appointment as MD and CEO since that appointment needed a joint nomination. In court, we gave our consent to support the continuation of him as MD provided a full disclosure was made. We have no objection to him continuing as long as there is more transparency and governance. This is a public trust institution and we have no problems in dealing with any person so long as basic principles of transparency and governance are followed.
After a long-drawn battle, do you think the two largest promoters will be able to put the past behind and work smoothly?
We are happy to work constructively as long as there is transparency, governance and trust from their side.
You said the banking regulator has not done enough. What were your expectations from RBI?
We expect the regulators to make a fair assessment of this case.
While the Bombay High Court said YES Bank board appointments should be made jointly by promoters, it has ruled out your appointment as board member. How do you see the verdict?
We are very happy with the judgment as our rights have been recognised as joint with Rana uncle. Most importantly, we cannot be declassified from our promoter status. The court has passed orders preventing Rana Kapoor and YES Bank from even making such applications to the RBI (Reserve Bank of India). Further, seven directors have been unseated. At a personal level, I feel Rana uncle could have handled this with more dignity and grace, especially to respect the rights of his late partner who died tragically in the Mumbai terror attack. Rana uncle has made this a modern-day Mahabharat.
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My appointment as a board member was never a prayer in our suit. It only came about when Justice Kathawala in 2013 ordered me to send my application to the YES Bank board and from there it became a part of this litigation. Predictably, the board denied it, the Bombay HC in its recent order observes: "One may question the way in which the board went about considering Shagun's so-called nomination. It may even be described as churlish or even vindictive."
Rana Kapoor said he will change the Articles of Association. Do you think he is in no mood to go ahead with joint nomination? What is your plan under such circumstances?
I cannot judge his mood. I made that judgement many times in the past and was proved wrong by him. If he wants to change the articles to deny us our rights, there wouldn't be anything new or alarming he would be doing. He has done it over the past seven years and will be doing it again. Till date, he has been nominating unilaterally and exercising the very same rights under the very same articles. Now that the court has ordered these rights are joint; suddenly the articles need to be updated to reflect today's reality.
Our trust was broken time and again. What does that tell you of his intent? Why is he fighting joint nominations so hard? Does he fear a negative voice on the board? My father was one of the most respected persons in the financial community. He co-promoted the bank. He put his sweat and wealth into promoting it. Even after his death we have not sold our stake. We are the second-largest shareholders in the bank. Why will we not act? Are we not capable of acting in the best interest of the bank? I have no idea why or how one nominee on a board comprising up to 15 directors can make such a difference to Rana Kapoor. In today's world of transparency, that only raises doubts.
Do you think your battle to get rights has ended with the verdict or is it still a long way to go?
I feel we have been vindicated. We fought the battle on the grounds that we were denied our rights as per the Articles of Association. Rana Kapoor argued that these rights were personal to him and only he had the right to nominate. As I said, till date he has been unilaterally exercising the same rights as per the articles. Now, he will need our consent in those very nominations.
We have been classified as promoters and successors of my late father. Rana uncle cannot be writing behind our back anymore to declassify us. If you are a non-promoter in a bank, you have to bring down your shareholding to below five per cent. Was his intention for us to sell out? Even in this matter, the court observes: "The applications to the RBI to this end are motivated, self serving and prima facie unlawful…" I must note that even before me, Rana Kapoor and YES Bank went to great lengths to withhold these documents.
You have said there are governance and transparency issues in the way the bank has been functioning. Why do you say that?
There are many examples to the above. The list is endless. To state a few:
The first example being the application made to the RBI in 2012 for the appointment of Rana Kapoor as MD was not complete. The bank cited article 127(b) in its application as the component authority to make that appointment but only annexed 127(a) and 127(c) in its application to the RBI. Is this mere oversight in such an important application? Of course 127(b) talks about this appointment being a joint nomination of the promoters.
As you can see, multiple self-serving letters to declassify us were written to the RBI behind our back. When those letters concern our status it is only correct to keep us informed so we may have a say. If there is so much transparency why does one need to get a court order to see these letters?
The bank stated that in 2009, we made requests for nomination of my mother and S L Kapur (nobody related to us), the chairman at the time, chaired that discussion at the board. The bank claimed that nomination was rejected in 2009. If that was the case, why were they not able to produce any nomination papers in court? Because there was no nomination made. Is this transparency?
Rana Kapoor will continue to be the MD & CEO of the bank. How comfortable are you with this?
We objected to Rana Kapoor's appointment as MD and CEO since that appointment needed a joint nomination. In court, we gave our consent to support the continuation of him as MD provided a full disclosure was made. We have no objection to him continuing as long as there is more transparency and governance. This is a public trust institution and we have no problems in dealing with any person so long as basic principles of transparency and governance are followed.
After a long-drawn battle, do you think the two largest promoters will be able to put the past behind and work smoothly?
We are happy to work constructively as long as there is transparency, governance and trust from their side.
You said the banking regulator has not done enough. What were your expectations from RBI?
We expect the regulators to make a fair assessment of this case.