Rana Kapoor wants to be Yes Bank chairman after his term as MD, CEO ends: Report

Yes Bank's outgoing Managing Director and Chief Executive Officer Rana Kapoor wants to be the bank's non-executive chairman after his term concludes in January, according to a report by Mint.

Kapoor and his rival promoter Madhu Kapur are negotiating terms of consent to settle their long-drawn legal battle.

A draft document of the terms, which was reviewed by the news daily, says that if Kapoor's appointment to Yes Bank's board is approved by its shareholders and the Reserve Bank of India (RBI), he will either become the non-executive chairman, or the MD and CEO, or a non-executive director.

The bank's current rules do not allow a whole-time director to be reappointed for at least two years from the date of him/her stepping down. So in accordance with them, Kapoor will have to wait till 2021 to become MD and CEO again.

The bank is set to recommend names for Kapoor's successor to the RBI in its board meeting on December 13. It will also consider appointments of independent directors at the meeting.

Sources close to Madhu Kapur confirmed to the paper that the terms have not been finalised yet.

Yes Bank's stock has taken a beating in recent times, with Moody's downgrading its foreign currency issuer rating because of corporate governance issues and leadership change.

Kapoor has confirmed in the draft agreement that the nominee director he appoints to the board will be a non-independent non-executive director at all times, except if his appointment as either MD and CEO or non-executive chairman or non-executive director is approved by the central bank.

According to the draft terms, if Kapoor becomes the chairman, he will be on the bank's board as a non-independent executive director.

These terms will allow both promoters to jointly recommend the name for chairman and MD and CEO of Yes Bank.

"The successors, legal representatives and assigns of Ashok Kapur confirm that subject to approval from RBI and shareholders of Yes Bank, they will consent and approve the appointment of Rana Kapoor either as non-executive chairman or MD and CEO of Yes Bank, and such consent shall be deemed to be given by them at all times," the document read.

The legal battle between Kapoor and Kapur started in 2008 after Yes Bank co-founder Ashok Kapur was killed in the Mumbai terror attack.

Kapur and her family have asked the bank to bear their legal expenses as they are its co-promoters, sources told the paper.

"This is one of the demands which is also a part of ongoing negotiations between the two promoters, but is not mentioned in the consent agreement," one source was quoted as saying.

After the terms of consent are agreed upon, the Bombay High Court will promulgate the agreement, along with relevant terms from the existing articles of association signed by the promoters in 2005.