YES Bank's independent director and chairman of the lender's audit committee Uttam Prakash Agarwal resigned on Friday citing deteriorating corporate governance standards and compliance failure in the bank. Agarwal was appointed as independent director on November 14, 2018 and his tenure was to end in November 2023.
In a communication to bourses, YES Bank shared resignation letter of Agarwal which said, "There are serious concerns as regards deteriorating standards of the corporate governance, failure of compliance, management practices and the manner in which the state of affairs of the company are being conducted by Ravneet Gill - MD and CEO, Rajiv Ubeoi- Senior Group President Governance Controls and Sanjay Nambiar- Legal Head and Board of Directors."
"I have raised my concerns on these very critical matters from time to time in the overall interest of YES Bank, and millions of its small and large depositors, investors, shareholders and all other stakeholders," Agarwal wrote in his resignation letter.
YES Bank responded to the allegations of deteriorating corporate governance standards by Agarwal and said, "In his resignation letter (as enclosed), Agarwal has made certain observations on the Bank's governance and the same shall be duly examined by the Board."
The bank further said it was reviewing the 'fit and proper' status of Agarwal as directed by the Reserve Bank of India. In this respect, the bank had obtained legal opinions from eminent jurists. These opinions were to be considered by the Nomination and Remuneration Committee of the Board ("NRC")/ the Board of the Bank in their meetings scheduled for today. However, prior to the commencement of the proceedings of these meetings, the bank received the resignation of Agarwal.
The matter relates to non-disclosure of criminal cases filed against Agarwal when he was appointed as in independent director in November 2018 during the tenure of co-founder and former managing director Rana Kapoor.
According to a report in Mint, the lender had received a whistleblower complaint questioning Agarwal's fit and proper status as an independent director immediately after his appointment.
In response, Agarwal had told the board this was just an omission and that all cases pending against him were civil in nature and had been dismissed in 2015 itself. Agarwal, a former chairman of Institute of Chartered Accountants of India, had contested Maharashtra assembly polls as a Shiv Sena candidate in 2014.