YES Bank share value dropped in afternoon trade today amid a media release that Uttam Prakash Agarwal, who was an independent director and chairman of YES Bank’s Audit Committee, has resigned. Agarwal was designated as an independent director on Nov 14, 2018, and his tenure was to complete in November 2023.
The resignation arrives on the day the bank is carrying a board meeting on capital raising concerns yet again. But Agarwal’s letter claimed that, in reality, there was no binding promise. One proposal has even come from a firm whose share capital is only 100 pounds, which the administration wanted the board to examine.
Agarwal in his resignation note raised matters of the management systems of the bank’s senior leadership team and said he had bestowed his concerns with all the applicable regulatory authorities.
There are dangerous concerns regarding declining standards of the corporate governance, failure of assent, administration practices and the way in which the state of affairs of the firm is being led by CEO and MD Ravneet Gill, Rajiv Ubeoi- Senior Group President Governance & Controls, Sanjay Nambiar- Legal Administrator and Board of Directors, Agarwal said in the note which was also directed to other key officials.
In a separate memorandum dated January 9, 2020, to SEBI Chairman Ajay Tyagi on these matters, he sought required regulatory interference from the regulator.
Agarwal, a chartered accountant by profession, in his letter to SEBI Chairman stated the bank CEO and MD in a conference on October 31, 2019, had told orally that the bank had taken a commitment of USD 1.2 billion investment from a global investor.
Meantime, BSE has asked clarification on the news release from the private sector bank. The lender’s board of directors will consider and think of raising funds in a conference to be held today. The private sector lender has been looking for capitals since its core investment funds are barely above the regulatory demand of a minimum of 8 percent.
The concerned private sector lender on October 31, 2019, had notified about accepting a binding offer for a USD 1.2-billion (approximately Rs 8,500 crore) funding from an abroad investor through fresh issuance of investment shares.
On December 2, the bank announced that Capital International, a member of the $1.87-trillion US-based Capital Group, has assigned to finance at least $120 million in the private sector lender. On December 10, the bank after its board meeting announced it would hold an investment proposal of $500 million from Citax Holdings and Citax Investment Group, figuring that it would proceed to evaluate other potential investors to increase capital to $2 billion.
In December end, Gill told the private sector lender would quickly conclude its capital-raising process. Gill confirmed that it is just a matter of time before the bank would inflate funds.
Yes Bank’s shares dropped nearly 75% last year, as non-performing assets on its records have accelerated sharply.
