In 2015, the Bombay High Court ruled that the bank has to follow the Articles of Association and consult both promoters before the appointment of a whole-time director
After a long ordeal, the Yes Bank board has independently shortlisted two potential persons for the post of CEO and Managing Director without consulting rival promoters Madhu Kapur and Rana Kapoor, Mint reported.
This is important as the two promoters signed an Article of Association (AoA) back in 2005, which clearly stated that the appointment of any whole-time director will have to be approved by the Reserve Bank of India (RBI) and its two promoters.
"The board has shortlisted the names after the nomination and remuneration committee of the bank approved the names on the recommendation of the search and selection committee and the appointed leadership advisory firm Korn Ferry," a source told the publication.
In 2015, the Bombay High Court ruled that the bank has to follow the AoA, which also allows appointment of one of the board members as a whole-time director, subject to RBI approval.
The top management of the bank had come under fire from the central bank for unsatisfactory corporate governance and accounting issues, which it is trying to improve. "The bank has sent a report on the recent measures in this regard to RBI in October,' a source told the paper.
Yes Bank co-founder Ashok Kapur was killed in the 2008 Mumbai terrorist attacks. A year later cracks surfaced between his wife Madhu Kapur and Rana Kapoor. Kapur and her children had to approach the Bombay High Court for greater say in appointing directors to the board.Both parties had reportedly sought an out-of-court settlement for the greater good of the bank in October last year.