Madhu Kapur the widow of YES Bank co-founder Ashok Kapur, has appealed to the bank's shareholders to vote against most resolutions to be placed at the lender's annual general meeting on June 14."It is important to first clarify that as the second-largest shareholder of the bank, I do not desire the functioning of the bank to be disrupted in any manner whatsoever. Therefore, I recommend you to pass the accounts but limit myself to requesting you to vote against resolution numbers four, five, six, seven, eight, nine, and 10, which I believe are not in the interest of the bank or its shareholders, and resolution number 11, which is in breach of the articles and the rights of late Ashok Kapur's family," according to the letter by her to shareholders.
YES Bank's response:
The Bank has come to know from certain media sources that Mrs. Madhu Kapur, a shareholder, has made certain baseless and untenable allegations against the Bank, its key management and Board of Directors, by way of a letter to some shareholders of the Bank. Similar allegations were also made by Mrs. Madhu Kapur before the Hon'ble Bombay High Court in June 2013 and the Bank has strongly contested the same, in accordance with law. The Bank believes that its stand/position before the Hon’ble Bombay High Court will be vindicated in the said proceedings. However, as the said shareholder has made incorrect and defamatory statements, the Bank has, without prejudice to its rights, set out the below response, to provide the shareholders' of the Bank a fair and correct picture about compliance and corporate and management governance at the Bank.
1. The Bank has always acted in a manner, which is in accordance with law and has upheld the principles of corporate and management governance. The subject matter in consideration at the AGM has been finalized in a transparent and legally compliant manner. Accordingly, upon requests received from certain shareholders suggesting names for the appointment of directors and finding them "fit and proper", as per the Reserve Bank of India (RBI) guidelines and the Banking Regulation Act, 1949 (BRA), the Bank has recommended their names at the AGM. Adequate and transparent disclosures have been made about the same in the AGM notice.
2. A close reading of the AGM Notice would unequivocally establish that the Board of Directors and management consist of competent and professional individuals who enjoy stellar reputation and standing. The credentials of the names put up for directorship are set out in the AGM Notice. This shows that the Bank is run in a professional manner.
3. The performance of the Bank as reflected in the Annual Report for FY 2013-2014 (including the preceding 9 years) establishes the consistent growth, phenomenal increase in wealth creation and net worth, despite adverse economic and corporate environment prevailing during the period. All this goes on to show the effectiveness of the Board and the Bank’s management in providing exceptional returns unprecedented by any private sector bank in 10 years of financial performance since its inception in 2004. The business and financial results of the Bank speak for itself and for the efforts of the management including the MD&CEO, and the Board of Directors. The Bank has consistently shared the wealth in the form of dividends with the shareholders over the last five years, when it started giving dividends.
4. In the process, the current valuation of Mrs. Madhu Kapur's shareholding of approx 4.3 Crore shares, which she inherited from Late Mr. Ashok Kapur is worth approximately Rs 2730 Crores (as against an initial investment of Rs 52 Cr in 2004).
The current share price of Rs 581 (valuing the 4.3 Cr shares at approximately Rs 2500 Cr) is almost 9.5 times of the share price of Rs 60 (valuing the 4.3 Cr shares at Rs 258 Crores) which was prevailing at the time of Mr. Ashok Kapur's demise over 5.5years ago.
Once the valued shareholders approve the Board recommended dividend of Rs. 8 per share, Mrs. Madhu Kapur would be receiving another Rs. 34 crores of tax free dividend in the present year, thereby her aggregate returns from dividend alone would be Rs 100 crores during the period.
YES Bank's response:
The Bank has come to know from certain media sources that Mrs. Madhu Kapur, a shareholder, has made certain baseless and untenable allegations against the Bank, its key management and Board of Directors, by way of a letter to some shareholders of the Bank. Similar allegations were also made by Mrs. Madhu Kapur before the Hon'ble Bombay High Court in June 2013 and the Bank has strongly contested the same, in accordance with law. The Bank believes that its stand/position before the Hon’ble Bombay High Court will be vindicated in the said proceedings. However, as the said shareholder has made incorrect and defamatory statements, the Bank has, without prejudice to its rights, set out the below response, to provide the shareholders' of the Bank a fair and correct picture about compliance and corporate and management governance at the Bank.
1. The Bank has always acted in a manner, which is in accordance with law and has upheld the principles of corporate and management governance. The subject matter in consideration at the AGM has been finalized in a transparent and legally compliant manner. Accordingly, upon requests received from certain shareholders suggesting names for the appointment of directors and finding them "fit and proper", as per the Reserve Bank of India (RBI) guidelines and the Banking Regulation Act, 1949 (BRA), the Bank has recommended their names at the AGM. Adequate and transparent disclosures have been made about the same in the AGM notice.
2. A close reading of the AGM Notice would unequivocally establish that the Board of Directors and management consist of competent and professional individuals who enjoy stellar reputation and standing. The credentials of the names put up for directorship are set out in the AGM Notice. This shows that the Bank is run in a professional manner.
3. The performance of the Bank as reflected in the Annual Report for FY 2013-2014 (including the preceding 9 years) establishes the consistent growth, phenomenal increase in wealth creation and net worth, despite adverse economic and corporate environment prevailing during the period. All this goes on to show the effectiveness of the Board and the Bank’s management in providing exceptional returns unprecedented by any private sector bank in 10 years of financial performance since its inception in 2004. The business and financial results of the Bank speak for itself and for the efforts of the management including the MD&CEO, and the Board of Directors. The Bank has consistently shared the wealth in the form of dividends with the shareholders over the last five years, when it started giving dividends.
4. In the process, the current valuation of Mrs. Madhu Kapur's shareholding of approx 4.3 Crore shares, which she inherited from Late Mr. Ashok Kapur is worth approximately Rs 2730 Crores (as against an initial investment of Rs 52 Cr in 2004).
The current share price of Rs 581 (valuing the 4.3 Cr shares at approximately Rs 2500 Cr) is almost 9.5 times of the share price of Rs 60 (valuing the 4.3 Cr shares at Rs 258 Crores) which was prevailing at the time of Mr. Ashok Kapur's demise over 5.5years ago.
Once the valued shareholders approve the Board recommended dividend of Rs. 8 per share, Mrs. Madhu Kapur would be receiving another Rs. 34 crores of tax free dividend in the present year, thereby her aggregate returns from dividend alone would be Rs 100 crores during the period.
