At Rs 65 apiece, Madhu Kapur, wife of the late Ashok Kapur who cofounded Yes Bank with Rana Kapoor, collected Rs 161 crore for the 2.5 crore Yes Bank shares she sold on Wednesday. Kapur couldn’t have sold more than 25 percent of her holding as the RBI’s three-year lock-in for investors kicked in.
Even for that Rs 161 crore, the Kapurs should thank the RBI and the government, which managed to execute an unprecedented rescue to save the bank.
Shorn of the unprecedented kind of rescue, which involved half of the private banking industry in the country, including the largest lender, SBI, the value of those 2.5 crore shares would have reduced to a few crores. For a perspective, look at these numbers.
At the recent 52-week low of Rs 5.65 apiece, the 2.5 crore shareholding of Kapur would have fetched just Rs 14 crore. In a way, the Kapurs paid the price for holding the family silver for too long, and commitment intact even during the bad times.
Remember, had the Kapurs sold the same 2.5 crore shares at the Yes Bank’s all-time high of Rs 393.85 apiece on August 20, 2018, they would have fetched them nearly Rs 980 crore. But money alone would not do justice to the intertwined saga of the Kapurs and Yes Bank.
“This is (just) the economic value. I think the struggle is much more,” said Shagun Gogia, daughter of Madhu Kapur, to Moneycontrol. The transaction brought down Madhu Kapur’s shareholding in the bank to 5.9 percent from 6.87 percent earlier.
The irony is striking. Rana Kapoor called his holding in the bank ‘diamonds forever’ only to sell it later while Ashok Kapur’s family held on until the last moment. The Kapurs sold part of their shareholding only after the ownership changed hands at the end of a dramatic rescue deal. Compared with what the shares would have fetched during the giddy periods of Yes Bank, the Kapurs were forced to sell their remaining shares at a throwaway price.
A nasty power battle
The share sale sums up the rollercoaster ride of the Kapur family. The Yes Bank co-founder, who set up the bank with Rana Kapoor, was killed in the 2008 Mumbai terrorist attack.
During the 16 years of Yes Bank’s journey from inception until its collapse, Ashok Kapur’s family has had a strained relationship with Rana Kapoor, the former CEO and MD of the private lender. Not long after Kapur’s death, the relations between the Kapoors and Kapurs turned sour. The trust Kapur family had on Rana Kapoor vanished.
Matters came to a head when Rana Kapoor refused to give a board seat to Shagun Gogia in Yes Bank, the daughter of Ashok Kapur and Madhu Kapur (sister of Rana Kapoor’s wife, Bindu Kapoor). Since 2013, Madhu Kapur, who inherited the promoter holding from husband Ashok Kapur, has been fighting a legal battle for the joint nomination right and a board seat for her daughter, Shagun.
Kapoor disagreed. He said Shagun didn’t have the necessary board experience. This tug of war continued for several years.
Finally, in April 2019, the two promoters — the Kapurs and Kapoor — buried the hatchet and appointed Shagun on the board of Yes Bank.
Kapoor’s conflict with co-founders didn’t begin with Ashok Kapur’s family. In 2003-04, when Yes Bank got its banking licence, pooling in the money they secured from their holdings in their earlier venture, Rana Kapoor and Ashok Kapur ousted their one-time partner Harkirat Singh. Kapur could not have known that his family would meet a similar fate years later.
Fast forward a few years. What a difference a few years make.
The dream run of Yes bank ended and it needed a government bailout to stay afloat. Half of Indian banking industry owns the company. And the noose is tightening on Rana Kapoor and his family for allegedly engaging in financial fraud and quid-pro-quo deals.
Poetic justice for Ashok Kapur’s family and Harkirat Singh?