In fact, there was so much resentment against Rana that within two years of starting the bank, two directors resigned. ‘YES Bank has informed BSE that P.R. Srinivasan and Ashish Dhawan, Director(s), have resigned from the Board and the same has been taken on record by the Board of Directors at its meeting held on April 28, 2006,’ the bank said in an April 2006 filing to the stock exchanges. But all hell broke loose on 26 November 2008. In what would be one of the worst terror attacks in recent history, ten members of the Lashkar-e-Taiba, an extremist Islamist terrorist organization based in Pakistan, carried out twelve coordinated shooting and bombing attacks that lasted four days across Mumbai.
On that fateful day, Ashok had gone for dinner with his wife, Madhu, to Trident Hotel’s Kandahar restaurant. Trident was one of the twelve places that the terrorists attacked. In the chaos, the couple was separated. Madhu was able to escape with the help of security officers. However, Ashok could not make it outside. His body was later found on the nineteenth floor of the hotel. The chairman of YES Bank, Ashok Kapur, had fallen to the bullets of terrorist and was one among the 166 killed.
The family was just getting over this tragic loss when a disagreement, which had started when Ashok was alive, between Madhu Kapur and Rana Kapoor came to the fore. This was just the beginning of one of the biggest power battles in India’s corporate history.
In January 2009, after coming to terms with losing her husband, Madhu approached Rana Kapoor, who was family to them, to nominate her daughter Shagun Gogia Kapur to the YES Bank board. She had a right to do so, according to the clauses discussed earlier. Rana Kapoor delayed it by saying: ‘Why don’t you come and meet the board in April, so that we can get it through?’ At that time, Rana held 14.8 per cent stake and Madhu, who had now replaced Ashok, held 12.68 per cent.
Shagun had done her bachelor’s in economics from Tufts University. She had done her master’s in business administration (finance) from the Indian School of Business. By 2004, she had started working in ICICI’s venture capital and private equity arm, ICICI Venture.
Unlike her cousin sisters, Shagun had started on her own and was heading Tuscan Ventures Pvt. Ltd—an investment firm that provided creative financing solutions to entrepreneurs building large businesses. The company was started in September 2007. By April 2008, she was joined by two veterans on the board of the company—Arvind Uppal and Bharat Suman Raut. Arvind is now chairman of Whirlpool India, while Bharat is a director at Bharti Axa Life Insurance Company Limited. Her mother, Madhu Kapur, only joined the board in December 2009. This runs completely contrary to the way her cousins used to run their companies. More about those later, here let’s focus on the differences: Shagun used to professionally manage the companies; and, secondly, she was trying to carve her own identity.
In April, the mother-daughter duo went to meet the board, who were under Rana’s complete control by then. The board told them that Shagun didn’t have the experience needed and requested that she wait for two more years. They waited for two years, as Shagun continued to work on her newly started venture. In 2011, a meeting was held between the families at Rana Kapoor’s residence. Unwilling to share power, Rana said, ‘The RBI won’t approve it. They would need someone else. Why don’t you appoint someone else?’
Now Ashok Kapur’s family knew some bankers and they started suggesting different names. At this point, Rana, according to people present in that meeting, started to deride these names, saying things like: ‘Arey yeh toh jamadaar hai (Oh, he is worthy of only sweeping homes and offices as a job).’ Madhu and Shagun realized the manipulation and left Rana’s home dejected.
There was no application made. Also, neither Madhu nor her daughter knew what the bank’s MoA empowered them with. The board of YES Bank had one person at time, Ajay Vohra. Ajay was the managing partner of the corporate, tax and business advisory law firm Vaish Associates, which is a part of the World Law Group. In 2008, months before Ashok died, Ajay was appointed as an independent director on the board of YES Bank. This wasn’t Ajay’s only connection with YES Bank. He was also the first cousin of Bindu Rana Kapoor and Madhu Kapur.
Shagun thought that since Ajay was on the board and her mother’s cousin, she could approach him for help. She asked Ajay if the memorandum gave her any rights. Ajay asked Shagun to send him an email containing the MoA. Some days later, Ajay informed Shagun that she didn’t have any rights. Dissatisfied, Shagun didn’t stop. She spoke to more people.
In fact, she also went on to meet the person who had helped Ashok and Rana draft the MoA. By this time, thanks to Rana’s attitude, the lawyer and Rana had had a falling-out. ‘See, Shagun, I can’t help you here. We still do a lot of business with YES Bank,’ the lawyer told her. Then, in late 2012, Shagun got in touch with a lawyer based in south Mumbai, who was more or less a one-man show at his firm. On sending him the MoA, this lawyer said that the articles of the MOA gave her full rights. But he had riders: ‘See, the family disputes are consuming time, energy and money. Be sure that you want to go ahead with it.’
Rana used to deride the family on various occasions. In November, there was a family gathering where both Madhu and Rana were present. The guests were congratulating Rana when Madhu asked him: ‘Rana, why are they congratulating you?’ Rana replied, ‘Oh, you don’t know? It is my twenty-fifth wedding anniversary. It is on the same day that
