Private lender YES Bank’s stock plunged nearly 12 per cent on the BSE on Wednesday, closing at Rs 161.70. This is the lowest for the bank in the past 32 months.
Rating agency Icra on Wednesday downgraded the bank’s rating. The agency said a series of resignations at YES Bank raised concerns about the lender’s corporate governance. It has placed the long-term rating for YES Bank on watch. It has also downgraded YES Bank’s basel III additional tier-I bonds from AA to AA-.
Moody’s downgraded the bank’s instruments and changed its outlook from stable to negative on Tuesday.
The lender announced it would submit names of the new chairman for the Reserve Bank of India’s (RBI’s) approval. It will also consider proposals for appointment of independent directors at a board meeting on December 13.
The bank saw four board-level exits in the past few months, with R Chandrashekhar being the latest one. He resigned because of discontent over the bank’s internal processes. Previously, the bank’s chairman, Ashok Chawla, had resigned, while former State Bank of India chairman O P Bhatt resigned from the panel looking for a MD and CEO.
Earlier this week, reports said companies owned by Rana Kapoor’s daughter — Yes Capital and Morgan Credits — paid Rs 2 billion each to two mutual funds as prepayment of the due amount. However, the bank issued a statement on Wednesday denying involvement in these dealings.
Kapoor’s three daughters — Rakhee Kapoor Tandon, Radha Kapoor Khanna, and Roshini Kapoor — are directors of two holding firms of the bank, Yes Capital (India) and Morgan Credits.
Morgan Credits or Yes Capital or the start-up ventures have no involvement and/or commercial dealings with YES Bank, except that the companies are among the promoter shareholders of YES Bank. They hold 3.04 per cent and 3.27 per cent shares respectively, said a statement issued by Three Sisters: Institutional Office — the investment vehicle of Kapoor’s daughters. It added both institutions run independently.
The statement said Rana Kapoor was not involved in any capacity, including as a shareholder, director or management, in any of these companies.