Former Yes Bank independent director Uttam Prakash Agarwal has demanded appropriate action against the lender's CEO and MD Ravneet Gill for allegedly violating various regulatory norms.

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Agarwal, who was independent director in 2018, resigned from the board of Yes Bank last month citing deteriorating standard of corporate governance at the private sector lender.

In a letter to RBI Governor Shaktikanta Das, Agarwal alleged breach of governance, non-compliance, undue influence and control on the majority members of the board by Gill through quid pro quo.

The letter also alleged there has been substantial erosion in the market capitalisation (m-cap) of about Rs 40,000 crore since Gill took over as the managing director.

The m-cap of the bank was Rs 55,000 crore on March 1, 2019, the date when Gill joined. The m-cap as on January 29, 2020 is Rs 11,000 crore, it said.

By use of various unethical means, Gill has been able to effectively control the majority of board members and Key Management Personnel (KMP).

The CEO seems to be knowing the weak points of KMP of the bank, it said, adding, Gill after his appointment shortlisted various KMP and ensured that each one of them gets bonus and annual increment.

Gill in a short period of 11 months was able to gain undue influence on majority of the board members sufficient for passing any resolution, it said.

The letter dated January 30, 2020, also alleged siphoning off funds through payment of unreasonable fee of Rs 21.28 crore for raising capital of Rs 1,930 crore in August by way of Qualified Institutional Placement.

The bank is continuing to manipulate by way of providing selective information to stock exchanges in relation to development in the capital raising programme.

First Published:Feb 5, 2020 8:22 PM IST