Yes Bank Chairman Ashok Chawla resigns over curruption charges

Yes Bank chairman Ashok Chawla resigned yesterday from the bank’s board after being named in a Central Bureau of Investigation (CBI) charge sheet in relation with the Aircel-Maxis case.

Chawla is also the chairman of National Stock Exchange of India Ltd (NSE). There is a cloud of uncertainty over whether he must vacate this post as well, in compliance with Reserve Bank of India’s “fit and proper” norms.

Yes Bank will now have to fill the position of the chairman even as it’s struggling to find a replacement for CEO Rana Kapoor, whose term was cut short by RBI, over questions regarding the strictness of the bank’s audit process.

On 19 July, the CBI named Chawla in a chargesheet related to the Aircel-Maxis case. On 4 October, NSE received a letter seeking action on Chawla’s directorship on its board. On 1 October, Special CBI judge O.P. Saini set the investigative agency a deadline of 26 November to secure the government’s nod to prosecute Chawla and others. Chawla might have to step down as NSE chairman if CBI gets the go-ahead to prosecute him.

Individuals under prosecution and those who have been convicted of any offence involving moral turpitude or an economic offence or violation of securities laws cannot lead stock exchanges under Sebi’s stock exchanges and clearing corporations norms.

Additionally, shares of private sector lender fell as much as 8 per cent to Rs 207 rupees, their lowest since November 5 following the news.