Market regulator SEBI has dealt a significant blow to Rana Kapoor, the former MD and CEO of private sector Yes Bank. On Tuesday, July 25, SEBI sent a notice to Rana Kapoor, demanding him to pay a penalty of Rs 2.22 crore. The notice accuses Kapoor of mis-selling the AT1 bonds of the bank. Failure to deposit the penalty within 15 days could lead to his arrest, along with possible confiscation of his bank accounts and properties. This comes in addition to Kapoor’s existing legal troubles, as he has been in jail since March 2020 in the DHFL money laundering case.
SEBI’s Notice: Rana Kapoor Faces Penalty for Mis-Selling Yes Bank’s AT1 Bonds
This is not the first time SEBI has taken action against Rana Kapoor in relation to the case of AT1 bonds. In September 2022, Kapoor was fined Rs 2 crore for the same matter. However, he failed to pay the fine, prompting SEBI to adopt a stricter approach this time. The current penalty of Rs 2.22 crore includes interest and recovery cost. If Kapoor fails to deposit the money within the given timeframe, his movable and immovable properties can be confiscated, and he may face arrest.
Penalty of Rs 2.22 Crore Demanded
The notice from SEBI revolves around the alleged mis-selling of AT1 (Additional Tier-1) bonds. It is claimed that the bank and some of its officials did not disclose the associated risks to investors while selling these bonds in the secondary market between 2016 and 2019. According to SEBI’s order, Rana Kapoor was involved in overseeing the sale of these bonds, consistently pressuring the team to increase sales. Moreover, Kapoor allegedly compelled the Private Wealth Management Team to devise a plan to facilitate immediate purchase of these bonds by the bank’s customers.
