As per the SEBI notice, a total of 1,346 individual investors had invested approximately Rs 679 crore in the AT1 bonds, out of which 1,311 individual investors were existing customers of Yes Bank.
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In a relief for Yes Bank Ltd in the AT-1 (additional tier-1) bonds case, the Securities Appellate Tribunal (SAT) has imposed an interim stay on an order passed by Securities and Exchange Board of India (SEBI), which had imposed a penalty of Rs25 crore on Yes Bank, and three of its executives Rs1 crore on Vivek Kanwar and Rs50 lakh each on Ashish Nasa and Jasjit Singh Banga.
This is a setback for the hapless AT-1 bond holders, which include retail investors, institutional investors like Indiabulls and 63 moons technologies, who had taken the legal route and complained to SEBI. The investors alleged that they were sold these bonds by the bank on false assurances and hence they need to be compensated by the bank. The case is ongoing in Bombay High Court but both YES Bank and the Reserve Bank of India (RBI) have so far maintained that the AT-1 bond write-off is as per the Basel III rules.
AT-1 bond case: SEBI imposes penalty of ₹25 crore on YES Bank
April 12, 2021
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The bank needs to pay the penalty within 45 days of the receipt of the order
SEBI has imposed a penalty of ₹25 crore on private sector lender YES Bank in the matter of Additional Tier 1 bonds.
It has also imposed a fine of ₹1 crore on Vivek Kanwar, who was the head of the bank’s Private Wealth Management Team, and of ₹50 lakh each on Ashish Nasa and Jasjit Singh Banga, who were part of the team.
Noting that more such complaints are being received by SEBI even after initiation of these proceedings, the order further said: “Therefore, on account of such misrepresentation and fraud perpetrated on its own customers, which lured them and induced them to buy these risky AT-1 bonds and also induced some of them to alter their position from FDs to these AT1 bonds, such acts have to be viewed seriously. Therefore, I consider a penalty of ₹25 crore on Noticee 1 in terms of Section 15HA of SEBI A
SEBI imposes penalty of ₹25 cr on YES Bank
Mumbai |
Updated on
Our Bureau
SEBI has imposed a penalty of ₹25 crore on private sector lender YES Bank in the matter of Additional Tier 1 bonds.
It has also imposed a fine of ₹1 crore on Vivek Kanwar, who was the head of the bank’s Private Wealth Management Team, and of ₹50 lakh each on Ashish Nasa and Jasjit Singh Banga, who were part of the team.
Noting that more such complaints are being received by SEBI even after initiation of these proceedings, the order further said: “Therefore, on account of such misrepresentation and fraud perpetrated on its own customers, which lured them and induced them to buy these risky AT-1 bonds and also induced some of them to alter their position from FDs to these AT1 bonds, such acts have to be viewed seriously. Therefore, I consider a penalty of ₹25 crore on Noticee 1 in terms of Section 15HA of SEBI Act is justified as it is commensurate with the violations and will also have a de