The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp
Search the internet for Yes Bank Ltd. and you’d have to look hard to find a positive story. Regulatory trouble, director resignations and stock price under pressure.
While none of those events are imaginary, the bank rather blame a rival for the bad press.
Yes Bank has accused financial newspaper Business Standard of publishing malicious and defamatory news reports, suggesting this was done at the behest of Uday Kotak, owner of the newspaper and rival Kotak Mahindra Bank Ltd.
In a filing with the stock exchanges, Yes Bank enclosed a letter addressed to senior editors at Business Standard accusing the newspaper of “a persistent attack on a public trust institution like Yes Bank Ltd., which is going through a transition phase in its life cycle”.
" The pattern/sequel of articles published by Business Standard in the last two+ months would clearly indicate that there is explicit malice and prejudice, which the journalist(s) of Business Standard are trying to demonstrate. Probably they are doing it at the behest of our competitors (also given the inherent conflict of interest given the common Promoter ownership of Business Standard and Kotak Mahindra Bank) or market manipulators, which only an internal investigation by Business Standard would reveal the extra-motivation received by such journalist(s). " - Yes Bank Letter
The bank has labelled the “continuous negative propaganda” as an “attempt to destabilise” it and “undermine the confidence of the stakeholders in the bank”.
"" - “... this is a criminal offence under the Banking Regulation Act, 1949.”
Kotak Mahindra Bank and its subsidiaries hold about 2,000 shares in Business Standard Ltd., which is less than 0.0013 percent of its capital, said Rohit Rao, chief communication officer at the Kotak Mahindra Group.
"Promoter Uday Kotak does not have any stake in Business Standard. Ownership of Business Standard is with the Kotak family and there is no presence of the Kotak family on the board of Business Standard. The company is independently run under the chairmanship of Mr. TN Ninan, one of the most respected figures in journalism." - Rohit Rao, Chief Communication Officer, Kotak Mahindra Group
Curiously, of the 13 stories listed in the letter as having caused this alleged offence, three are syndicated from news agencies and a quick check on the remaining shows they are news reports covering stock price movements or important board-related developments. One is an opinion column on the leadership changes in the banking industry and another is on allegations of GST evasion, which Yes Bank has commented on in the story.
The stories are spread over September, October, November—that’s say four stories a month — which does not suggest any unusual volume either. Yes Bank has been in the news for weeks now as its founder Rana Kapoor was denied a term extension as managing director and chief executive officer by the Reserve Bank of India.
The bank also witnessed the resignation of three independent directors, one of whom served as board chairman. Among them one director raised governance issues in a comment to Bloomberg that was reported on by other media as well.
One of the two external members appointed to a search committee, tasked with finding Kapoor’s successor, also quit mid-way through the process. The other has now been appointed as independent director.
Most of the Business Standard stories listed by Yes Bank in its complaint seem to be routine news coverage of these developments. Making it unclear why the bank is passing the buck.
. Read more on Business News by BloombergQuint.