The Securities and Exchange Board of India (SEBI) has granted permission for the release of Rana Kapoor’s previously frozen bank accounts, share holdings, and mutual fund investments. Kapoor, the former Managing Director and CEO of Yes Bank, has been in custody since March 2020 in connection with the DHFL money laundering case.
In July, SEBI issued a notice to Kapoor, demanding a payment of Rs 2.22 crore in relation to the alleged mis-selling of Yes Bank’s Additional Tier-1 (AT1) bonds. The notice included a warning of potential arrest and the seizure of assets, including bank accounts, if the payment was not made within 15 days. This amount covered the principal sum along with associated interest and recovery costs. The demand for payment arose after Kapoor failed to settle a previous fine of Rs 2 crore imposed by SEBI in September 2022.
Subsequently, in September of this year, SEBI took the step of attaching Kapoor’s bank accounts, demat accounts, and mutual fund holdings. However, the situation took a different turn when the Securities Appellate Tribunal (SAT) issued an interim stay on a SEBI order related to the mis-selling of Yes Bank’s AT1 bonds on September 12. Furthermore, SAT directed Kapoor to deposit a sum of Rs 50 lakh within six weeks, a condition that Kapoor met within the stipulated timeframe.
The case revolves around allegations of the mis-selling of Yes Bank’s AT1 bonds to retail investors without adequate disclosure of associated risks. The sale of these bonds took place between 2016 and 2019. In its order, SEBI had pointed out that Kapoor had overseen the entire operation related to the secondary sale of AT1 bonds, exerting pressure on officials to increase sales. This led to Kapoor being held responsible for acts of misrepresentation, suppression of material facts, manipulation, and mis-selling of these bonds to individual investors.
The case is scheduled for a final hearing on November 20. In a notice issued to all banks, mutual funds, and depositories, including CDSL and NSDL, SEBI has instructed them to release the bank accounts, lockers, demat accounts, and mutual fund folios of Kapoor, which were previously attached.
