 "Sebi imposes Rs 2 crore penalty on Rana Kapoor in AT1 bonds case")
The Securities and Exchange Board of India (Sebi) on Friday imposed a penalty of Rs 2 crore on Rana Kapoor, former MD & CEO, Yes Bank in a case pertaining to mis-selling of Additional Tier 1 (AT1) bonds of the lender.
The market regulator in its order has alleged that Kapoor pressured officials of its Private Wealth Management (PWM) team to “device devious scheme to dump the AT1 bonds on hapless customers of YBL/individual investors.”
The AT1 bonds of Yes Bank were entirely written off as a part of a restructuring scheme. This caused huge losses to retail investors who had exposure to these bonds.
According to Sebi’s order, 1,346 individual investors had invested approximately Rs 679 crore Yes Bank’s AT1 bonds, out of which 1,311 individual investors were existing customers of the bank.
Further, about 277 customers had existing fixed deposits with Yes Bank, which were prematurely closed to invest in these bonds. The sale of Yes Bank’s AT1 bond started in 2016 and continued till 2019.
“Considering the large number of investors impacted and the quantum of sales achieved through this scheme, I am of the opinion that this act of Noticee (Kapoor) deserves penalty commensurate with the severity of violation and would be a deterrent,” the Sebi order says.
The market regulator in its order has alleged that Kapoor pressured officials of its Private Wealth Management (PWM) team to “device devious scheme to dump the AT1 bonds on hapless customers of YBL/individual investors.”
The AT1 bonds of Yes Bank were entirely written off as a part of a restructuring scheme. This caused huge losses to retail investors who had exposure to these bonds.
According to Sebi’s order, 1,346 individual investors had invested approximately Rs 679 crore Yes Bank’s AT1 bonds, out of which 1,311 individual investors were existing customers of the bank.
Further, about 277 customers had existing fixed deposits with Yes Bank, which were prematurely closed to invest in these bonds. The sale of Yes Bank’s AT1 bond started in 2016 and continued till 2019.
“Considering the large number of investors impacted and the quantum of sales achieved through this scheme, I am of the opinion that this act of Noticee (Kapoor) deserves penalty commensurate with the severity of violation and would be a deterrent,” the Sebi order says.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%