Lawstreet Journal

SEBI slaps Rs. 1 crore fine on Rana Kapoor for violating disclosure norms

Lawstreet Journal 28 Sep 2020 10:35pm

Image courtesy: Lawstreet Journal Executive SEBI slaps Rs. 1 crore fine on Rana Kapoor for violating disclosure norms

Markets regulator SEBI on Friday imposed a penalty of Rs 1 crore on Rana Kapoor, former MD, and CEO of Yes Bank, for not making disclosures about Morgan Credit’s transaction.

By not disclosing about the transaction to Yes Bank’s board of directors, Kapoor has created an opaque layer between him and stakeholders, Sebi said in an order.

Morgan Credits, which was an unlisted promoter entity of Yes Bank, raised Rs 950 crore from Reliance Mutual Fund, now Nippon India Mutual Fund, through unlisted Zero-Coupon Non-Convertible Debentures (ZCNCDs) in April 2018.

Kapoor, who was also the promoter of Yes Bank, entered into an agreement as a ‘guarantor’ with Morgan and Milestone Trusteeship Services with respect to the transaction through a trust deed.

Kapoor being a ‘guarantor’ of the agreement has provided a “personal guarantee for the obligations of Morgan to the extent of Rs 410 crore and provided his shares in the company as a security for the outstanding amounts equal to Rs 820 crore, Sebi noted.

According to the regulator, Kapoor has hidden the material information of him being a ‘guarantor’ to the transaction from the board of directors of the bank and the same has directly impacted the lender in terms of market capitalization.

In addition, he failed to inform the board of directors of Yes Bank about his material interests in the transaction.“The transaction carried out by the noticee via Trust Deed dated November 14, 2018, by way of providing ‘personal guarantee’ for the obligations of the Morgan issued ZCNCDs was an event involving… Continue Reading...


Tagged: SEBI   Yes Bank  
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