INSUBCONTINENT EXCLUSIVE:
Mumbai: City-based proxy advisory firm Stakeholders Empowerment Services (SES) has advised the shareholders of Yes Bank to vote against a
proposal to raise $1billion, citing that the resolution is omnibus and may dilute over 5 per cent equity of the existing public
their tenure will exceed the stipulated 5-year term.
Shares of Yes Bank, which had gained 8.5 per cent so far this year as against a fall of
3.5 per cent of BSE Bankex, declined half a per cent to 338 on Friday
Yes Bank had issued a notice to shareholders on April 26 seeking approval for various resolutions, including fund raising, appointment of
independent directors and employee stock options for its employees as well as that of its subsidiaries
Shareholders have to respond through evoting between June 8 and 11.
The fund raising proposal, SES said, may potentially dilute around 7.87
per cent equity for the existing shareholders
The bank, however, said that the aggregate amount of the issue shall not result in an increase of subscribed equity capital by more than 10
per cent of the then issued subscribed equity
However, according to SES, the bank may raise funds in one or more tranches, and therefore the base value of equity capital for determining
reckons that institutional buyers participating in the QIP may exploit the arbitrage opportunity arising due to the discount of up to 5 per
cent to the floor price.
However, Yes Bank clarified that the maximum possible dilution due to the current proposal of 75 million stock
tenure will cross the 5-year period.
The board appointed two directors on April 26, 2018, but the bank wants these directors to be appointed
as independent directors from June 12 for a term of 5 years
Citing the section 149(10), which states that an independent director shall hold office for a term of up to 5 consecutive years, SES
believes that the aggregate term proposed will exceed 5 years as stipulated under the Act.
