Mass Exodus of Directors From Yes Bank in 3 Months

Krishna Nair 12 June 2019

Financial year 2018-19 marked a rather unsettling year for Yes Bank even more so for its board of directors.

Ever since Rana Kapoor was not permitted by the RBI to continue to be on the Board of Directors of Yes Bank, the bank has suffered an exodus of directors. Only two members of board from April 3rd 2018 remain.

Ashok Chawla tendered his resignation without giving any reasons. Mr Chawla was named in a corruption case filed the Central Bureau of Investigation (CBI) in the Aircel-Maxis case. Vasant Gujarathi the head of the Audit Committee also tendered his resignation on the same day as Ashok Chawla. The Audit committee performance issues have also been cited as a reason for Gujarathi resigning.

Lt General (Dr.) Mukesh Sabharwal resigned in order to pursue academics whereas Mr. Saurabh Srivastav did the same after completion of his term on 22nd April 2018.

Brahm Dutt has been appointed as part time chairman of the Bank till 10th January 2022, which has been approved by the RBI.

Debjani Ghosh tendered her resignation from the board of Yes Bank on account on her joining NASSCOM as Executive President.

The Current Board of Yes Bank as of 12th June 2019 is as follows.

Here are some details regarding the recently appointed members:

1. Shri R Gandhi, ex deputy governor of RBI has been appointed as an additional director on the board of the bank for 2 years.

2. Mr. T.S. Vijayan is appointed as an additional Director (Independent) of the Bank with Immediate effect and his appointment is for a period of 5 years.

3. Mr. Uttam Prakash Agarwal has been appointed as an additional Director (Independent) of the bank with immediate effect and his appointment as independent director for a period of 5 years subject to the approval of shareholders in the next General Meeting of the Bank.

4. The Board of Directors of the Bank on April 26th, 2018 have approved the appointment of Dr. Pratima Sheorey as an additional (Non executive and Non independent) director of the bank.

No sooner was Mr. Chandrashekhar appointed to the Board of Directors of Yes Bank than he chose to resign as he was “unhappy with developments taking place in the recent past and how it was handled”. All of this hints at grave mismanagement in Yes Bank.

Comments

User

Bipin Kochar

5 years ago

Given the lack of confidence indicated by the investors in Ravneet Gill, the board should immediately induct 4-5 shareholder directors.

Further, board should pass a resolution that any fresh dilution will either be through a rights issue or priced not less than the last QIP issue as adjusted for bonus or splits.

Ramesh Poapt

5 years ago

R Gill told that it will take 3 yrs+ to clean the bank.

V ganesan

5 years ago

when ever a stock is rising tremendously in one decade is correcting in the next decade.there is no exception.only few have outperformed continuously. it has moved up from Rs.40 to RS. 2000 of facevalue Rs.10 in the last decade.It is bound to correct.It may underperform in the next few years.

Ajay Sharma

Replied to V ganesan comment 5 years ago

It is always best to look at the fundamentals before citing mean-reversion. By your logic the broad stock market should never increase decades at a time; higher gains in one decade would result in losses in the next!

SANDESH PAWAR

5 years ago

well the valuations are mouth watering. Even Warren Buffet invest in banks when they are stressed. He always says it will be worth more in the future. don't put a number.
I have been tracking Ravneet Gill in interviews not related to business & he seems like a good man with good values. I think we have a really good opportunity to buy at this level.

Arun

Replied to SANDESH PAWAR comment 5 years ago

Valuations may look mouth-watering. But, the stress this bank has gone through so far is just the tip of the iceberg. It may be wise to stay away from this stock.

Ajay Sharma

5 years ago

It is also worth noting that this chaos at the BoD hints at the uncertainty surrounding the accountability of Directors. What Director would want to be with a company that was in turmoil? Especially when they may not particular want to get into the nitty-gritty of the business.