Yes Bank opposes lawsuit, tells HC directors were duly elected

MUMBAI: Yes Bank, the private lender at the centre of a feud, today told the Bombay High Court that three part-time directors appointed in its Annual General Meeting (AGM) on June 8 were duly elected.

It termed the suit challenging their appointment as not maintainable.

Madhu, the widow of Yes Bank's co-founder Ashok Kapur, filed a suit challenging appointment of directors nominated by current Managing Director and CEO Rana Kapoor and seeking to make her daughter Shagun Gogia as a director.

Yes Bank counsel Ravi Kadam told the high court that proper procedures were followed in the AGM regarding election of the three directors -- Diwan Arun Nanda, Ravish Chopra and M R Srinivasan. He argued that Madhu Kapur's charge that they were not duly elected was "incorrect and baseless".

Madhu's counsel Darius Khambata argued that the resolution for appointment of these directors was not properly passed in the June 8 meeting as there was no proposal in this regard. Hence, they were not duly elected.

Yes Bank argued that the plaintiff had demanded at the AGM that she needed a poll. This itself was a proposal which was recorded in the AGM as the majority of shareholders had supported it, its counsel maintained.

After the poll at AGM, counting was held and all the resolutions were supported by over 80 per cent shareholders. Hence, it could be said that the directors were duly elected, Kadam submitted.

The listed lender further said it had informed the Bombay Stock Exchange that the directors had been duly elected. It had also submitted "Form 32" with the Registrar of Companies as laid down in the Companies Act. All procedures in the appointment of directors had been followed.

Kapur has also challenged the decision of the Bank's Board to appoint three whole-time directors, Rajat Monga, Sanjay Palve and Pralay Mondal. Their appointment, made in a meeting on June 24, is, however, subject to the approval of Reserve Bank of India and the Annual General Meeting.

Kapur's suit also challenges the Board's decision to reject her daughter Shagun's nomination as a director.

Ashok, who founded the mid-sized lender along with Kapoor in 2004, was killed in the November 2008 Mumbai terror attacks. Shagun was nominated by her mother as a legal heir to Ashok's 12 per cent stake in the bank. However, her nomination was rejected by the Board on qualification grounds.