Rana Kapoor gives in to Yes Bank board diktat; agrees to return previous years' salary bonus
Under pressure from the Reserve Bank of India, Rana Kapoor, Yes Bank Chief Executive Officer and Managing Director, has given in to the Yes Bank board's diktats by agreeing to return bonuses given to him during the financial years 2016-17 and 2017-18, plus the current fiscal. The decision came after the Yes Bank board recommended that Kapoor should not get any bonus for these fiscal years as the RBI had cut short his tenure. Also, no salary enhancement has been proposed for Kapoor in the last and current financial years. All these recommendations have been sent to the Reserve Bank of India (RBI) for the final clearance.
However, the Yes Bank board is likely to take a final decision on Rana Kapoor's successor by December 15. The board is working on the final name and will soon convey its preference to the central bank, which will then take a final call on the matter before the new chief executive officer joins in February 2019. Kapoor, the founder and promoter of the bank, has been asked by the Reserve Bank to step down after the RBI found that the bank had under-reported its NPAs.
Yes Bank last week appointed US-based advisory company Korn Ferry to find a new candidate for the top post. For this, the bank also set up a committee, including three internal and two external members, to find the right candidate.
Earlier, the Yes Bank had decided to seek at least a three-month extension for Rana Kapoor, citing Kapoor's association with the bank since its formation in 2004. The bank had also said that finding a suitable successor was a "time-consuming challenge".
Madhu Kapur, the wife of deceased co-promoter Ashok Kapur and also his legal heir, had also reportedly written to the board, asking Kapoor to be sent on leave till January 31 to ensure a fair search. She had also raised objections over Kapoor's leadership and had demanded a forensic audit of loans sanctioned under him.
While Rana Kapoor owns 10.66 per cent of the bank, Madhu Kapur, the wife of late Ashok Kapur who co-founded the bank with Rana Kapoor, owns over 8 per cent. Yes Bank, along with another private lender Axis Bank, was found to have under-reported non-performing assets by over Rs 10,000 crore each for two consecutive years in regulatory audits conducted by the RBI. Thereafter, the central bank had cut short the tenures of Rana Kapoor and Axis Bank CEO Shikha Sharma.
Edited by Manoj Sharma