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The Bombay High Court has deferred hearing the dispute between Madhu Kapur and YES Bank over her right to nominate directors on the bank's board by a fortnight. The next hearing is now scheduled on April 29, after the bank’s board meeting.
YES Bank’s board of directors will meet on April 23, to approve the lender’s annual and quarterly earnings, and to recommend dividend, if any, for the financial year 2013-14 (April-March). “So far, there has been no development on settling the dispute outside the court," a person familiar with the development told Business Standard, requesting anonymity.
In the previous hearing, the court had said that Rana Kapoor, managing director and CEO of YES Bank, and Madhu should try and settle the dispute outside the court. Madhu 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.
Earlier Madhu Kapur had moved the court alleging that her right as co-promoter of YES Bank was violated and she was not consulted before the appointment of three new directors on the private lender's board. As per the articles of association ofthe bank, the Indian partners of YES Bank must jointly recommend appointment of directors on the board. In the petition, she also claimed that the three directors did not meet 'fit and proper' criteria of the Reserve Bank of India (RBI).
The bank, however, had made a preliminary objection that as per Section 10A (6) of the Banking Regulation Act, 1949 dispute over appointment of directors on a bank's board cannot be heard by a civil court. But the Bombay High Court had dismissed the claim and agreed to hear Madhu Kapur's plea.
