| YES Bank promoters may opt to settle dispute out of court | |||||||||||
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Kolkata, 10 June The dispute between YES Bank promoters —Rana Kapoor and Madhu Ashok Kapur ( widow of co- founder Ashok Kapur) — might be heading for an out- of- court settlement, with both parties appearing to be in favour of such an arrangement, according to people familiar with the developments. "It will be nice, as nobody wants asituation like this. We will certainly favour an out- of- court settlement," aperson close to Madhu Kapur told Business Standard, requesting anonymity because of the sensitivity of the issue. In 2009, a few months after Ashok Kapur's death in the 26/ 11 Mumbai terror attack, Madhu Kapur had requested the bank for a board position but the proposal was rejected. Earlier this month, she requested the bank to appoint her daughter, Shagun Kapur Gogia, as her nominee board member. Kapur then filed a petition in the Bombay High Court, requesting a stay on the bank's annual general meeting ( AGM) and alleged she had not been consulted on the appointment of three directors — Diwan Arun Nanda, Ravish Chopra and MR Srinivasan — in violation of the bank's articles of association. While the court refused to order a stay on the AGM, it directed YES Bank to advance its board meeting by amonth to June 27 and consider Gogia's appointment as a director on the bank's board. "YES Bank Chairman MR Srinivasan and Rana Kapoor had offered to discuss Shagun's appointment in the bank's next board meeting ( originally scheduled on July 24) even before the court order. They had offered to resolve the dispute through discussion. So, there is scope for this matter to be settled outside of court," said another person familiar with the development. A source indicated the disagreement between the promoters was primarily over the right to nominate directors on the board of the bank. "Whether or not Shagun should be appointed is secondary. According to the articles of association, the family of Ashok Kapur has the right to nominate directors on the bank's board. That right needs to be protected," the person said, adding the dispute could be resolved if the bank allows Madhu Kapur to nominate directors. Another person confirmed both the parties were in favour of an outofcourt settlement, saying: " Both the groups need to reach an agreement; Iam confident that it is possible." The next hearing on the case is scheduled for July 1. SPECIAL Coverage > YES Bank directors reluctantly in the spotlight >Bank to raise $500 mn this year >Bank chief earned 25% more in FY13 >Reschedule board meet to June 27: HC FINANCE II, 4 > | |||||||||||
| Sebi to mull new buyback norms, fewer FII routes | |||||||||||
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Mumbai, 10 June The Securities and Exchange Board of India ( Sebi) will review norms governing share buybacks, foreigners' equity investments into the country and listings of small and medium enterprises (SMEs) when its board meets later this month. The capital market regulator might bring in rules to shorten the buyback period and put greater onus on companies that embark on such share purchases. " The overhaul of buyback regulations done through open market purchases could be an important item on the agenda," said asenior Sebi official. Its board is scheduled to meet on June 25. Sebi plans to increase purchase obligations in share buybacks and bring on more post- offer obligations. The regulator, in January, had released adiscussion paper for modification of the framework for share buyback done through the open market route. The paper proposes to mandate companies to buy back at least 50 per cent of the announced quantity and to put 25 per cent of the maximum buyback amount in an escrow account. It also recommends to shorten the timeframe to just three months from one year at present. Further, it also proposes to bar companies from raising capital for two years, post buyback. Experts said the market regulator was more likely to come out with a' watered down' version of the discussion paper. Sebi has already announced key changes to buybacks done through the tender method. However, over 95 per cent buyback done in the country was through the open market route. While the Sebi official declined to divulge anything further about the board meeting, people in the know said Sebi might also take up the issue of rationalisation of foreign institutional investor ( FII) investment routes. The regulator is likely to merge certain FII routes into one and announce a new risk- weighted KYC ( Know Your Customer) framework for different categories of foreign investors. In December, Sebi had set up a committee headed by former cabinet secretary K M Chandrasekhar to take steps for implementation of the report of the Working Committee Group on Foreign Investment in India ( WCGFII) and suggest measures for combining various foreign portfolio investment routes into one. The expert group was entrusted with the job to study the operational issues in merging the FII routes and suggest ways for smooth implementation. Sources said the committee has completed its review and will give its report to Sebi this week. At present, foreign investors can invest through various routes including foreign direct investment, foreign institutional investment, foreign venture capital investment and as qualified foreign investors. Incidentally, the WCGFII, set up by the finance ministry, was headed by UK Sinha, the then chief of UTI Mutual Fund. Further, the Sebi board could also bring in a new framework for listing of SMES without an initial public offering or compulsory fund raising, an announcement made during the Union Budget said. The regulator has set up an expert panel of officials drawn from stock exchanges, legal and private equity firms, to suggest new guidelines. The group has already held three meetings and is likely to make the final recommendations soon. Sources said the Sebi board would also be apprised of the minimum public shareholding drive and discuss if any further action needs to be taken against companies that have failed to comply. The threeweek timeframe provided by Sebi for non- compliant companies to respond to its showcause notice ends on June 25. Sebi to mull new buyback Board meeting on June 25
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Company Secretary, Chennai
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