Yes Bank CEO in violation of several regulatory norms: Ex-Director

Mumbai (IANS) Demanding Yes Bank CEO Ravneet Gill's resignation, its ex- independent Director Uttam Prakash Agarwal has alleged that the bank's top boss has violated several regulatory norms.

In a detailed letter to the Reserve Bank of India, which has been accessed by IANS, Agarwal has claimed that the country's fourth largest private bank has seen "a massive erosion in its market cap" owing to Gill's undue influence on the board members which enabled him to flout rules.

Agarwal, who has been at loggerheads with Gill after he resigned from the bank board last month citing governance issues at the bank, alleged that Gill allowed unreasonable fees to be paid to certain select advisors.

The ex-Director said that the bank has appointed CLSA, JM Financials, Motilal Oswal Prime Securities (previously blacklisted by SEBI) and Yes Securities as global co-ordinators and book running lead managers who were paid approximately Rs 2.40 crore by way of fees for raising capital.

In contrast, the bank "appointed M/s Samaya Capital LLP as advisor (whose name did not figure either in the information memorandum or in the press release), a company incorporated on July 19, 2016, having a gross turnover of Rs 4.25 crore and Rs 10.32 crore for the financial year 2018-19, which was paid the sum of Rs 18.88 crore for not doing any work..." Agarwal said in his letter.

Earlier last month, Yes Bank rejected Erwin Singh Braich's $1.2 billion investment offer, saying that it will raise Rs 10,000 crore by issuing securities. The bank also said that it will take up Citax Holdings and Citax Investment Group's investment offers in the next board meeting.

Uncertainty on the bank's future has also found roots owing to corporate governance issues. Recently, Independent Director and Audit Committee Chairman Uttam Prakash Agarwal resigned, alleging that CEO and MD Ravneet Gill was misleading the bank's board and shareholders.

Besides, its financials have also come under heavy scrutiny. Rating agency ICRA noted that Yes Bank's solvency profile remained weak with net NPA/CET of 36 per cent as on September 30, 2019. A number of rating firms have red flagged the bank's exposure to stressed projects.

Owing to uncertain news flow, Yes Bank, once the traders' favourite, has proved to be one of the biggest wealth destroyers. Its stock price on Thursday closed at Rs 38.55 a share from a high of Rs 285.90 on April 4, 2019.