Mumbai: The Yes Bank board at its annual general meeting (AGM) on Wednesday studiously avoided shareholder queries on Rana Kapoors future at the lender. The meeting was held in the backdrop of two directorial exits by independent members earlier in the week after the promoter had made demands for a re-entry.
Kapoor, ET reported on June 12, had last month written two letters to the board, seeking re-induction at the lenders highest decisionmaking body and lost compensation that ran into crores of rupees. He was represented by his wife Bindu Kapoor at the AGM, the first to be held after Kapoor stepped down as the executive boss of the bank he had helped found.
Ravneet Gill, the banks new CEO, promised shareholders that the management would make every effort to keep their trust, focus on risk management, and restore the bank to its old glory. He also said that the banks asset quality issues were being blown out of proportion.
“The market has responded a lot more conservatively to our asset quality issues than what is justified,” Gill told shareholders. “The banks asset quality issues are not cyclical; 3-4 of our large exposures are facing liquidity issues and since these are concentrated exposures, the market wants to see the resolution to these names before they are able to raise a green flag on us.”
The AGM comes just days after high-profile board exits at the lender that has been the biggest loser on the Nifty 50 – the index for Indias biggest stocks – over the past one year. Mukesh Sabharwal, chairman of the nomination and remuneration committee, quit on Tuesday citing personal reasons. Former interim CEO Ajai Kumar had quit on Monday, also on personal grounds.
The Reserve Bank of India (RBI) had refused to approve the renewal of Kapoors tenure as chief executive of the bank last year, citing governance and accounting lapses, forcing it to hire a new CEO. The RBI had nominated retired deputy governor R Gandhi to the board of Yes Bank last month to make sure that the lender adhered to prudential norms and that checks and balances were in place.
“The recent resignations of board members of Yes Bank add to the growing number of board-member exits seen since last year. Coupled with the recent rating downgrades, we believe it is an overhang on the stock performance,” said Lalitabh Shrivastawa, AVP – research, Sharekhan. “We believe it is a concern and are not advising fresh investment at these levels.”
The stock has lost 60 per cent in the past one year.
Moodys Investors Service on Tuesday placed Yes BRead More – Source