Yes Bank’s problems get further compounded as its chairman is forced to resign amid a corruption probe
- The non-executive chairman of
Yes Bank, Ashok Chawla, submitted his resignation on 14 November.
- The move is a significant blow for Yes Bank, which was counting on Chawla to steady the ship ahead of the departure of CEO
Rana Kapoor, whose tenure will not be extended past January 2019 following an order from the RBI.
- In July 2018, Chawla, who is a former secretary of the finance ministry, was named in a chargesheet filed by the Central Bureau of Investigation in relation to the Aircel-Maxis case.
Yes Bank, one of India’s largest private sector banks, hasn’t had an easy go as of late.
Just a few months after the Reserve Bank of India (RBI) refused to extend the tenure of its CEO and founder Rana Kapoor, precipitating a crash in its market value, its non-executive chairman, Ashok Chawla, has resigned.
On Wednesday, the bank confirmed the news of Chawla’s resignation, explaining that it needed a chairman that could devote more attention to the bank as it navigated the management transition period. The move is a significant blow for Yes Bank, which was counting on Chawla to steady the ship ahead of Kapoor’s departure.
In September, RBI had refused to extend Kapoor’s tenure owing to lapses in governance at Yes Bank which led to under-reporting of non-performing loans under the RBI’s regulatory requirements that mandate all banks recognise and make provisions for bad loans in their balance sheets.
Separately, Chawla, who is also the chairman of the National Stock Exchange of India (NSE) and a former joint secretary in the Ministry of Finance, is currently a person of interest in a
In 2011, Sivasankaran said he was forced into selling the stake in Aircel by India’s telecom minister, Dayanidhi Maran. It was subsequently found that a firm owned by Maran’s brother received a hefty payment from Maxis for facilitating the deal. Former Union Finance Minister P Chidambaram and his son Karti have also been charged with money laundering in the case.
The RBI has sought to take a sterner approach towards corporate governance in recent times. In October, the CEO of ICICI Bank, Chanda Kochhar, was forced to step down amid a conflict-of-interest scandal.
Yes Bank now has to scramble to find a new CEO and chairman. At the end of October, it had shortlisted more than 12 candidates to succeed Kapoor, who term as CEO ends on 31 January next year. A final list is expected by the end of November. Meanwhile, owing to Chawla’s alleged involvement in the Aircel-Maxis case, the Securities and Exchange Board of India is reportedly in the process of deciding on whether or not he should continue as the chairman of the NSE.
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