Kapoor and Late Kapur : A story

  • Rana Kapoor is aggressive while Ashok Kapur was conservative.
  • RBI liked Kapur but not Kapoor.
  • Kapur dies in the Mumbai terrorist attack ( 2008).
  • Meanwhile Kapoor goes berserk ( 2008-2017).  Kapoor starts giving loans to bad people and bad companies at higher interest rates. He takes upfront fees from them to run the bank.
  • Kapur and Kapoor families get into big fight in 2017.
  • Kapoor becomes a billionaire and Bloomberg makes him a King. He is wooed by all including industry bodies and press and government.
  • RBI smells a rat and starts spying. RBI orders Kapoor to get out and hunts for a new CEO. Yes Bank’s shares tank ( 2018). The bank’s profit estimates misses big time. Chairman and 2 Independent directors walk out. Moody’s give a bad rating.
  • New CEO joins and shares go up.
  • RBI slams a fine for non-compliance ( April 2019). SEBI accuses Yes Bank for insider trading.  Quarter results declare losses.
  • Revamp of top management.
  • Macquarie downgrades ratings and ICRA follows suit. RBI slaps fine for violating money transfer norms.
  • Kapoor takes loan against his entire stake in the Bank.
  • New CFO in Sept 2019.
  • Kapoor sells some stake in open market.
  • The President quits in Nov 2019.
  • Dec results again declare losses. Moody’s give a negative rating. Shares slump.
  • RBI forces SBI to step in after Yes Bank refuses Hong Kong investor and failed to woo PE firms.

In the lieu of high-interest rate, the bank that had built an asset book of over Rs 3 lakh crore in a little over a decade lent easy loans to companies such as IL&FS, Dewan Housing, Jet Airways, Cox & Kings, CG Power, Cafe Coffee Day.

Worth mentioning here that most of these companies have either went a bust or registered negative growth in recent years.

Analysts believe that the bank has not collapsed overnight. The stress that the bank was going through took three-four years to show up, especially after the PMC bank crisis, it became almost certain that the bank will sink. However, neither the directors of the bank nor the management or the RBI tried to salvage the bank.

Yes Bank’s trouble also started worsening when the economic cycle turned worse and the government announced demonetization.

Founder of the bank, Rana Kapoor has been one of the most leading voices that supported the demonetisation. Analysts believe the bank’s inability to monetise collateral against loans also led to the crisis.

At the back was it  Sharad Pawar in work in starting the bank to giving loans to Anil Ambani and others of the same ilk ?

Everyone made money in Yes Bank after Ashok Kapur’s demise. Politicians, Businessmen who took loans, Kapoor and the top management ( who are no more with Yes). Retail investors and common retail banking customers fooled again.

Yes

 

 

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