Millennium Post

Finally, 'tainted' Rana Kapoor leaves Yes Bank… Ajai Kumar is interim CEO

Finally, tainted Rana Kapoor leaves Yes Bank… Ajai Kumar is interim CEO

Mumbai: Rana Kapoor's reign as the managing director and chief executive of Yes Bank, which was co-founded by him, finally ended Thursday. The Reserve Bank had last September asked him to leave office by January 31 following which the board unsuccessfully sought an extension till September 2010.

The midsized private sector lender Thursday appointed its non-executive director Ajai Kumar who had led state-run Syndicate Bank in the past, as his interim successor for a month till Ravneet Singh Gill from Deutsche Bank India takes over from March 1.

The aggressive and temperamental Kapoor, who has had stints with foreign lenders earlier, had launched the bank along with his co-brother the late Ashok Kapur in the early years of the century. Kapur was killed in the 26/11 terror attack at the Trident Hotel and there was a bitter feud between Kapoor and Kapur's heirs which played out in the courts.

The two warring groups of promoters who collectively own around 20 percent of the bank, however, reached a truce Tuesday by agreeing to appoint one non-independent director each on the board.

But the feud with the co-promoter and the RBI action on him had the bank stock, which was one of the premium buy for long, getting whacked since last September, having lost more than two-thirds of its value since then. Even on a day the benchmark Sensex rallied close to 2 percent, Yes Bank stock was one of the few to lose, shedding 2.6 percent to Rs 194.30 on the BSE, down almost 55 percent from its 52-week high of Rs 404.

Kapoor is credited with building the bank by deftly deploying wads of money in sponsorships and advertisements which served the bank well in getting marquee investors to buy into the bank, along with modern banking practices.

Though the RBI offered no official reasons for shortening his term, it has been attributed to the regulatory audit finding out that the bank under-reporting NPAs by a cumulative Rs 10,000 crore for two consecutive years. the RBI had cited "serious lapses" in governance and a "poor compliance culture" at Yes Bank.

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