Yes Bank chairman Ashok Chawla resigns with immediate effect

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Mumbai: Former bureaucrat Ashok Chawla Wednesday resigned as non-executive chairman of Yes Bank, the private sector bank said. According to sources, Chawla offered to quit as controversy was being generated on his continuance on the Board of Directors following his name appearing in a CBI chargesheet in the Aircel-Maxis case.

“Yes Bank announces that Shri Ashok Chawla, Non-Executive Independent Part-Time Chairman, has tendered his resignation from the Bank’s Board, with immediate effect, mentioning that during the current transition period, the Bank would need a Chairman who could devote more time and attention,” the bank said in a regulatory filing. The bank shall in due course announce the appointment of a Chairman, post RBI’s approval, it added.

As per sources, representations were being made by shareholders and stakeholders to the bank as well as regulators like Sebi questioning his continuance on the Yes Bank’s Board after being named in chargesheet filed in Aircel-Maxis case by the premier investigating agency CBI in July. Former Finance Secretary Chawla had also worked as Chairman of the Competition Commission of India. Following representations, the bank’s Nomination & Remuneration Committee had decided to seek legal opinion on his continuance as a Chairman. It was observed the bank should seek the opinion of the RBI on Chawla’s issue, sources said.

Later, the bank sought RBI’s opinion, though no reply was received from the regulator, sources said adding Chawla himself offered to quit in the interest of the bank. Another independent director Vasant Gujarathi too has tendered his resignation with immediate effect due to personal commitments, said another filing of the bank. However, sources said Gujarathi, who was heading the audit committee, had resigned because of certain observations made by the RBI on issues related to audit and corporate governance in the bank.

The bank’s board has also approved appointment of Uttam Prakash Agarwal as an additional director (Independent) for a period of five years. The Reserve Bank has already asked the private sector bank to find replacement of founder MD and CEO by January 31. Last month, Yes Bank had said the panel looking for a successor to MD and CEO Rana Kapoor had finalised potential candidates. Yes Bank shares closed at Rs 222.5 on BSE, down 1.37 per cent.