| cloud on AGM season |
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Mumbai, 7 June The freeze on promoter voting rights by the Securities and Exchange Board of India ( Sebi) at the beginning of the season for annual general meetings (AGM) has cast doubts on whether companies would be able to pass resolutions. Earlier this week, Sebi had passed an order against promoter individuals and entities of 105 companies for failing to reduce their shareholding to at least 75 per cent. Besides prohibiting these companies from accessing the market, Sebi also imposed a freeze on voting rights and benefits, such as dividends and bonuses, on the promoters of noncomplaint companies. The deadline for meeting the minimum public shareholding norm for private companies expired on June 3. The regulator has said the freeze on voting rights would be to the extent of excess promoter or promoter group shareholding. For instance, if the public shareholding in a company is just 12.5 per cent, which means the company has only achieved 50 per cent public holding ( half of 25 per cent), half the promoter holding would be frozen. Securities law experts believe as more than 50 per cent votes are needed to pass an ordinary resolution ( special ones need more), more clarity is needed on how non- compliant companies would be able to pass resolutions. Shriram Subramanian, founder and managing director, InGovern Research, said, " There is no clarity on whether such companies would be able to pass the issue required interpretation of rules. "The passing of an ordinary resolution will require more than 50 per cent votes. If half the voting rights are frozen, the companies may find it difficult to pass a resolution," he said. According to an analysis by Business Standard, of the 70- odd companies ( excluding those in the suspended category), Experts said Sebi should provide clarity on how the issue could be resolved. Some experts say Sebi is likely to consider the unfrozen part of voting rights for passing resolutions. MS Sahoo, lawyer member of Sebi, Services, and former executive director of Sebi, agreed. "They have frozen shareholding in a proportionate manner, which means ordinary resolutions could still go through if the votes are considered as a total of the unfrozen. In rare cases, it could create a situation where special resolutions, which require a larger number of votes, might be blocked," he said. Freeze on voting rights casts VOTE BLOCK Top companies where voting rights ofmore than 50% have been frozen Non- complaint cos [1] Promoter holding [1] Freeze in voting rights (%) REIL Electricals Vippy Industries Chettinad Cement Bombay Rayon Shantivijay Jew. Best Eastern Hotels Marathon Nextge Source: Capital Line 92.76 98.19 82.80 95.70 77.92 94.48 72.60 93.15 72.40 93.10 58.40 89.60 56.56 89.14 |
| It's Kapoor vs Kapur in YES Bank court battle |
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Mumbai, 7 June The Bombay High Court today provided interim relief to YES Bank's Co- founder, Chairman & Managing Director Rana Kapoor, as it refused to grant a stay on the bank's annual general meeting which the widow of an ex- director of the bank had sought. The petition was filed by Madhu Ashok Kapur — the widow of Ashok Kapur, who co- founded the bank with Rana Kapoor and Rabobank in 2004 — and her two children. According to the petitioners, they should have been consulted before appointment of anyone as director on the bank's board. Rana Kapoor is the brother- inlaw of Ashok Kapur, the chairman of YES Bank who died in the 26/ 11 Mumbai terror attack. According to the Bombay HC order, senior counsel Birendra Saraf, representing Madhu Ashok Kapur, said the main grievance of the plaintiffs was that they had not been consulted by Rana Kapoor and, in fact, the names of the three individuals were recommended by Kapoor for the director's post without concurrence of the plaintiffs. The Bombay HC said, considering the ongoing process of holding the AGM, scheduled for tomorrow, and the probable election of those three individuals, no adinterim relief was granted in favour of the plaintiffs at this stage. However, the court said the appointment of the three individuals, if confirmed as directors at the AGM, would be subject to directions when the matter comes up before the regular court next week. "It is a one- sided dispute; there's no issue either from YES Bank or Rana Kapoor's perspective," a spokesperson of the bank said, without giving details. Kapoor was not immediately available for comment. On October 27 last year, YES Bank had informed BSE that Ravish Chopra, Diwan Arun Nanda and M R Srinivasan had been appointed as additional director( s) on the board with effect from October 23, 2012. These three directors were to be considered for re- nomination at the AGM, according to the notice to shareholders. Rana Kapoor gets interim relief from Bombay HC but directors' appointment subject to final order THE STORY SO FAR Nov ' 03: YES Bank incorporated Mar ' 04: Promoters Rana Kapoor & Ashok Kapur, and key investors including Rabobank infuse capital May ' 04: Licence to start banking business received from RBI Aug ' 04: First branch opened in Mumbai. Jul ' 05: YES Bank shares listed on local stock exchanges after a ₹ 315- crore IPO. Stock closes at ₹ 60.80 on day 1; Market cap: ₹ 2,184.48 cr Mar ' 06: First full year of operations completed with ₹ 55.3- cr profit Nov ' 08: Ashok Kapur dies in Mumbai terror attack Apr ' 10: Bank's next growth phase launched Dec ' 11: Savings deposit rate raised to 7%, one of the highest offered by a bank Sep ' 12: RBI's approval received for securities broking business Mar ' 13: FY13 closed with a net profit of ₹ 1,301 crore Jun 7, ' 13: HC hears petition of Madhu Kapur & children; Share price: ₹ 503.10; Market Cap: ₹ 18,075.88 cr SHAREHOLDING PATTERN Promoters — the Rana Kapoor and Madhu Kapur factions — together hold 25.72% in the bank ( As of Mar ' 13) Source : Bombay Stock Exchange filings, Capitaline Madhu Kapur12% Personal stake 9.79% Mags Finvest 2.21% Rana Kapoor 13.72% Personal stake 5.58% YES Capital 4.22 % Morgan credits 3.92% FIIs 48.95% [1]Others 12.10% [1]MFs / UTI 3.96% [1]Insurance companies 9.27% |
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Company Secretary, Chennai
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