Rana Kapoor's daughters have disproved of Reliance Nippon Life Asset Management (RNAM) selling promoter shares of Yes Bank pledged by their father. In a statement issued on Wednesday, they said that shares were pledged to support the borrowings of Morgan Capital Private Limited, a company run by them for investing in start-up ventures.
Rana Kapoor, a promoter of Yes Bank, has less than 5 per cent stake left in the private lender. He had pledged the same to RNAM, the asset manager of Reliance Mutual Fund, as collateral. On Tuesday, RNAM had asked its trustees to sell the remaining shares pledged by Kapoor.
In the statement, the Kapoor's daughters said that the promoter shares of Yes Bank had to be sold "considerably below even the book value" to deleverage their companies, Morgan Capital Private Limited (MCPL) and Yes Capital (I) Pvt Ltd (YCPL). They expressed "extreme disappointment" in the fact that RNAM sold balance pledged promoter shares for MCPL in the open market.
"It is important to clarify that the sale of shares by us or by RNAM in no way reflects our views on Yes Bank... We firmly believe that the Bank led by its highly capable management team and Board, is firmly positioned to continue on its growth path and deliver value for all stakeholders as it did consistently over the last several years since its commencement in 2004," the statement further read.
After the RBI refused to extend Kapoor's tenure as the chief of Yes Bank, the share price of the lender has been under pressure. This has raised concerns among mutual funds, as the shares were the primary security against which loans were given, and fund houses feared booking mark-to-market losses.
On Tuesday, stock of Yes Bank came under massive selling pressure in afternoon trade and plunged over 20 per cent to Rs 29.05 on the BSE. The stock closed at Rs 32.00, down 22.80 per cent.