Its curtains down for the longstanding Kapoor versus Kapur dispute at Yes Bank. Madhu Kapur and family have now relinquished their status as promoters of the bank, less than three months into the bank’s bailout.

Yes Bank on Saturday informed exchanges that it “received a letter dated May 28, 2020 (Received on May 29, 2020) from (i) Mrs. Madhu Ashok Kapur; (ii) Mrs. Shagun Kapur Gogia; (iii) Mr. Gaurav Ashok Kapur; and (iv) Mags Finvest Private Limited

The Bank said it would take further necessary action to give effect to the above.

The family collectively holds a 1.42 percent stake in the bank, as per the latest shareholding data. Madhu Kapur and family held a 1.12 percent stake in Yes Bank, and their family-controlled entity Mags Finvest Private Limited held another 0.30 percent stake as of March 31, 2020. Rana Kapoor, on the other hand, sold most of his stake in the bank to repay debts, and now holds only 900 shares. The same Kapoor had once famously claimed that his shares in the bank were like “diamonds”, and he would hold onto them forever.

The notification did not mention the status of Rana Kapoor, founder and co-promoter of the 16-year old bank.

When asked the reason for this dramatic change in the promoters' position, a senior official of Yes Bank clarified to CNBC-TV18 “Once the government-approved reconstruction scheme for Yes Bank was implemented, then there is no promoter. De-classification in a sense has been done by the government through their reconstruction scheme. Since Madhu Kapur family sent the bank this letter, we disclosed it on exchanges as part of SEBI’s LODR (Listing Obligations and Disclosure Requirements).” This person added, “It could be their (Madhu Kapur family) interpretation of the law, maybe that’s why this consent letter was sent. There’s nothing else to read into this.”

CNBC-TV18 also contacted Shagun Gogia, former board member of Yes Bank, and co-promoter Madhu Kapur’s daughter about this move.

Gogia told CNBC-TV18, “The bank approached us to ask if we would consider giving our consent for being de-classified as promoter…The bank is looking to raise capital, and the new investors have to be given full disclosure on promoters. So therefore the bank requested us to help to make the capital raising process simpler, and we said sure whatever is in the interest of the bank.” She also clarified that she no longer holds a board position at Yes Bank since the board was reconstituted and remains a non-promoter public shareholder.

After Madhu Kapur, Rana Kapoor is also expected to be de-classified as a promoter of the bank. “Whether Rana Kapoor gives his consent or not, he can no longer remain a promoter,” said the Yes Bank official quoted earlier on the condition of anonymity.

Rana Kapoor, currently facing ED investigations for alleged money laundering, and the late Ashok Kapur co-founded Yes Bank in 2004. Insiders say Rana Kapoor had slowly but surely side-lined Ashok Kapur’s role at the bank over the years and taken up the key responsibilities himself. After the death of Ashok Kapur in the 26/11 terror attacks on Mumbai, the dispute between the two families became public.

Rana Kapoor refused to concede to Madhu Kapur’s demand that her family is represented on the bank’s board. This led to Madhu Kapur taking her brother-in-law, Rana Kapoor​, to Bombay High Court over the matter in 2013. A long courtroom battle ensued. In 2019, by when Rana Kapoor was removed from the CEO position by the regulator, the two finally reached a settlement, and Kapur’s daughter Shagun Gogia was given a board seat.

The bank is now being helmed by its third Chief Executive Officer in less than two years. While the reconstruction is complete, the problems are far from over. Yes Bank is now looking to raise almost Rs 15,000 crores to clean up its books, strengthen its weak balance sheet. With Madhu Kapur & family giving up their promoter status, and a similar fate awaiting Rana Kapoor, at least the Kapoor-Kapur era is well and truly behind.

First Published:May 31, 2020 5:28 PM IST