In a letter written to the editorial leadership of the Business Standard, which competes nationally with The Economic Times, the bank’s general counsel Sanjay Nambiar cited “conflict of interest” as the reason behind news coverage that he described as “predatory, vindictive, and ruthless.”
The alleged conflict of interest pertains to the daily’s ownership by the Kotak family, which also owns Kotak Mahindra Bank, which is a rival to Yes Bank.
Yes Bank has sent a copy of the letter to both the BSE and the NSE.
“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…”, Yes Bank said in the letter, referring to the news coverage.
For its part, Kotak Mahindra Bank, which is owned by Asia’s richest banker Uday Kotak, pointed to the independent operational structure at the daily to counter allegations of likely conflict of interest.
“Kotak Mahindra Bank and its subsidiaries hold about 2,000 shares in Business Standard Ltd, which is less than 0.0013% of its capital. Promoter Uday Kotak does not have any stake in Business Standard,” said Rohit Rao, chief communication officer, Kotak Mahindra Group. “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 TN Ninan, one of the most respected figures in journalism.”
Yes Bank and Kotak Mahindra Bank started operations around the same time in 2003-2004. Yes Bank has a market capitalisation of ?40,147 crore while Kotak Mahindra Bank has a market capitalisation of ?2.31 lakh crore. Kotak has evolved from an investment bank to a full-fledged lender with interests spread across asset reconstruction, life insurance, and private equity.
Yes Bank, meanwhile, has focused on growing corporate advances while building a commensurate liability profile.
Yes Bank’s shares have been under pressure after the Reserve Bank of India (RBI) curtailed Rana Kapoor’s tenure as its managing director and CEO. The stock has fallen more than 50% in the past three months.
Business Standard responded to this story post it’s publication. Here is what it stated:
“Business Standard rejects the charge, especially since no factual errors have been pointed out by the bank. Most of the reports alluded to are of a routine nature, relating to press releases and other announcements by regulators, credit rating agencies or the Bank itself. Wherever required, the paper’s reporters have taken the bank’s point of view.
We have a well-established reputation for fair and balanced reportage, free from external or business influence. The allegations are an unwarranted slur on the paper, made worse by the posting of the bank letter on the two stock exchanges. Mr Rana Kapoor of Yes Bank was made the BS Banker of the Year for 2012, when also the Kotak family owned the paper. This is hardly evidence of negative bias.”