{"id":109834,"date":"2021-01-23T21:03:19","date_gmt":"2021-01-23T21:03:19","guid":{"rendered":"https:\/\/precoinnews.com\/?p=109834"},"modified":"2021-01-23T21:03:19","modified_gmt":"2021-01-23T21:03:19","slug":"rana-kapoor-banker-gone-rogue","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/rana-kapoor-banker-gone-rogue\/","title":{"rendered":"Rana Kapoor: Banker gone Rogue"},"content":{"rendered":"
‘The book captures Rana Kapoor’s hunger for real estate leading to bungalows in Delhi, Mumbai, London and other cities; the multiple companies — over 100 — to fund his family’s various ventures; the attempt to game the system by showing lower non-performing assets,’ notes Joydeep Ghosh.<\/strong><\/p>\n A banker gone rogue, indifferent independent directors, a lax regulator — Pavan C Lall’s Yes Man<\/em> — brings all these corporate governance issues back in focus.<\/p>\n The book traces the tumultuous journey of YES Bank, and its promoter and former chairman Rana Kapoor.<\/p>\n But unlike Harshad Mehta, this is not a rags-to-riches story.<\/p>\n Instead, it is the reverse — in the end, Mr Kapoor did not have enough money to pay lawyers’ fees.<\/p>\n What makes the book interesting is the initial few chapters, which brings out Mr Kapoor’s zeal to make it big in a world of more professionally-qualified people.<\/p>\n Coming from an affluent family, he played snooker with Sunil Mittal who went to found telecommunications giant Bharti Airtel.<\/p>\n He studied economics at Shri Ram College of Commerce and then did an MBA from Rutgers, New Jersey.<\/p>\n Interestingly, he was given an opportunity to join Bank of America, Barakhamba Road branch, at a time when every other intern was an IIM-Ahmedabad graduate.<\/p>\n Word on the street, the author says, was that a few calls from Mr Kapoor’s well-connected maternal uncle clinched the appointment.<\/p>\n In BankAm, reportedly mentored by the highly-respected and connected Vikram Talwar, Rana Kapoor rose to head the Delhi branch and NRI business — despite being a credit and marketing officer for just five years.<\/p>\n His career mantra: ‘While he was driven to meet sales targets and achieve his personal targets, he could at times seem somewhat obsessed by a compulsion to keep pushing the limits when he was ahead…. If he was up, he would go for double or nothing. Triple or nothing. Quadruple or nothing.’<\/p>\n Things changed when Ambi Venkateswaran — a veteran in BankAm since 1975 — became head of India operations.<\/p>\n Initially, Mr Venkateswaran expected a young Mr Kapoor, who had ambitions to head India operations, to settle down.<\/p>\n Instead, Mr Kapoor, besides lending to small companies without following protocols, issued commitment letters worth over $2 billion to half-a-dozen large companies.<\/p>\n When the Reserve Bank of India called, Mr Kapoor was hauled up and he quit.<\/p>\n His next stop: Country head and general manager, ANZ Grindlays, which lasted till 2000, when ANZ sold its Grindlays banking subsidiaries to Standard Chartered.<\/p>\n YES Bank’s beginnings were equally controversial.<\/p>\n The original idea came from Harkirat Singh, a Grindlay’s veteran and first Indian to head Deutsche Bank in India, who roped in Ashok Kapur, a former colleague and veteran of several banks, including ABN AMRO, to work on the significant yet untapped potential opportunity in the food and agricultural sector.<\/p>\n Enter Rabobank, which wanted to get a bank licence, for a tie-up.<\/p>\n But things were delayed and a non-banking financial company (Rabo India Finance) was started, with a plan to become a bank.<\/p>\n Ashok Kapur introduced Rana Kapoor, his brother-in-law, working with Rabo India, to his partner without revealing their relationship.<\/p>\n The Kapur\/Kapoor duo was keener on a corporate bank and investment bank — diametrically different from the earlier vision.<\/p>\n With some directors in Rabobank favouring the latter vision, Harkirat Singh exited<\/strong>.<\/p>\n What started as a three-promoter venture became a two-promoter bank in 2004.<\/p>\n <\/p>\n Things went downhill after Mr Kapur’s death in the 2008 Mumbai terror attacks<\/strong>.<\/p>\n It was generally known that Mr Kapur, a hard-nosed but gentlemanly banker, was unhappy with his brother-in-law’s style of operations.<\/p>\n But his death gave the latter a free hand.<\/p>\n From here, things grew ugly.<\/p>\n While growing the bank aggressively, Mr Kapoor tried every trick in the book to keep Ashok Kapur’s daughter, Shagun Kapur Gogia<\/strong>, from joining the board.<\/p>\n He also tried declassifying Mr Kapur’s holdings as promoters’ shares.<\/p>\n Ms Gogia is a double major in economics and biology, from Tufts University, and an MBA (finance) from the Indian School of Business, Hyderabad.<\/p>\n She worked with ICICI Ventures and had set up Tuscan.<\/p>\n Worse still, when he met Ms Gogia and her mother Madhu Kapur, he started the conversation with ‘Who the f#*k are you to be writing letters to me?’ Before that, at a party in 2009, Mr Kapoor told Madhu: ‘It was our 25th wedding anniversary last year, but that had to be cancelled because your husband died.’<\/p>\n At the same time, YES bank’s board loaded up independent directors with no experience in the financial sector.<\/p>\n The rest of the book captures Rana Kapoor’s hunger for real estate leading to bungalows in Delhi, Mumbai, London and other cities; the multiple companies — over 100 — to fund his family’s various ventures; the spat with Rahul Bhatia (Indigo) over Gautam Thapar’s property; the kick-back deals with Housing Development and Infrastructure Limited; and the attempt to game the system by showing lower non-performing assets.<\/p>\n The RBI, on its part, knew things weren’t right for a while.<\/p>\n But it chose to let things sort themselves out, arguably for a bit too long.<\/p>\n But when companies –IL&FS, ADAG Group, Cox &Kings, DHFL, Jet Airways, Essel Group and others — fell within months, Mr Kapoor’s days were numbered.<\/p>\n Ravneet Gill, the new MD and CEO tried to clean up the books, but the challenge was too daunting.<\/p>\n The bank fell<\/strong>. And the State Bank of India and others had to step in to bail out depositors.<\/p>\n In all, the author actively reports and tries to cover all the angles of the scam.<\/p>\n For the uninitiated, it is an interesting read.<\/p>\n Even for a veteran, the initial chapters can be quite revealing.<\/p>\n Minor complaint: It could have been shorter, say, around 160-odd pages.<\/p>\n Tailpiece<\/strong>: In 2008-2009, during the global financial crisis, Chanda Kochhar became the CEO and Managing Director, ICICI Bank, Rana Kapoor got a free hand to run YES Bank and Shikha Sharma became Managing Director of Axis Bank.<\/p>\n A decade later, all three were ousted. The former two over criminal charges, the latter for too aggressive lending practices.<\/p>\n Feature Presentation: Aslam Hunani\/Rediff.com<\/em><\/strong><\/p>\n