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Former CEO of Yes Bank fined ₹ 1 Crore For Violating Disclosure Norms

Saransh Pandey

Intern
  • September 26, 2020
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    SEBI is looking into the matter about possible requirements of disclosure in view of the transaction by Morgan Credits of raising ₹ 950 crores from the Reliance Mutual Fund

Former Yes Bank managing director and CEO Rana Kapoor has been fined with ₹ 1 crore by the Securities and Exchange Board of India (Sebi) for violating disclosure regulations regarding a transaction of Morgan Credits Pvt Ltd, which is an unlisted promoter entity of Yes Bank. SEBI is looking into the matter about possible requirements of disclosure in view of the transaction by Morgan Credits of raising ₹ 950 crores from Reliance Mutual Fund through unlisted zero-coupon non-convertible debentures on April 19, 2018. 

Stock exchanges BSE and NSE have been asked information with respect to the transaction by the stock market regulators, who have informed that they had not received any disclosures under the LODR Regulations and the SAST Regulations from Yes Bank or its promoters. Sebi has been informed by the company that its promoter Morgan had raised ₹ 950 crore from Reliance Mutual Fund which was not in the nature of encumbrance of shares by promoters. There has been no requirement of disclosures under the LODR Regulations and SAST Regulations. 

According to the Sebi order, issued by Adjudicating Officer Amit Pradhan this matter is about not disclosing substantial material interest in the transaction to the company's board of directors. The notice has created an opaque layer between him and stakeholders. According to Amit Pradhan, this case should not be taken lightly and there should be an imposition of a monetary penalty proportionate to the default as found in this case. 

Rana Kapoor has been imposed a consolidated monetary penalty of a total ₹ 1 crore for the violations of Regulations 4(2)(f)(i)(1) and 4(2)(f)(i)(2) of the LODR Regulations under section 15HB of the Sebi Act. Kapoor is currently in judicial custody in connection with a money-laundering probe by the Enforcement Directorate.  

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