 "Sebi issues Rs 2.22 cr demand notice to YES Bank's former MD Rana Kapoor")
Sebi on Tuesday sent a notice to Yes Bank's former MD and CEO Rana Kapoor asking him to pay Rs 2.22 crore in a case of misselling the lender's AT-1 bonds and warned of arrest if he fails to make the payment within 15 days.
The regulator also warned that his assets and bank accounts would be attached in case the payment is not made within the stipulated time.
The case relates to misselling of the bank's AT-1 (Additional Tier-1) bonds to retail investors by the bank's officials.
It was alleged that the bank and certain officials did not inform investors about the risk involved while selling the AT-1 bonds in the secondary market. The sale of AT-1 bonds started in 2016 and continued till 2019.
The demand notice came after Kapoor failed to pay the fine imposed on him by the Securities and Exchange Board of India (Sebi) in September 2022.
In a notice issued on Tuesday, Sebi directed Kapoor to pay Rs 2.22 crore, which includes interest and recovery cost, within 15 days.
More From This Section
In the event of non-payment of dues, the markets regulator will recover the amount by attaching and selling his moveable and immoveable property. Besides, Kapoor faces attachment of his bank accounts and arrest.
In September 2022, the regulator imposed a penalty of Rs 2 crore on Kapoor in the case of misselling the private sector lender's AT-1 bonds.
In its order, Sebi stated that Kapoor was overseeing the entire operation relating to the secondary sale of AT-1 bonds, taking regular updates from the team and giving them further instructions to increase the sales, thus creating pressure on the officials to ramp up the sales.
Further, the regulator stated that Kapoor was responsible for acts of misrepresentation or suppression of material facts, manipulation, and misselling of AT-1 bonds of Yes Bank to individual investors.
Also, Kapoor pressured officials of the private wealth management team to devise a devious scheme to dump the AT-1 bonds on hapless customers of Yes Bank, as per Sebi.