SEBI slaps Rs 1 crore fine on ex-Yes Bank MD Rana Kapoor for disclosure lapses

SEBI said that by not disclosing about the transaction to Yes Bank's board of directors, Kapoor has created an opaque layer between him and stakeholders.

Published: 25th September 2020 07:33 PM  |   Last Updated: 25th September 2020 07:33 PM   |  A+A-

Former Yes Bank MD Rana Kapoor

Former Yes Bank MD Rana Kapoor. (File photo| IANS)


NEW DELHI: 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 "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 the market capitalisation.

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 substantial material interest and was having direct bearing on the company," the regulator said.

By not disclosing the same to the board of directors of the company, the noticee (Rana Kapoor) has violated the provision of the LODR (Listing Obligations and Dislcosure Requirements) Regulation, Sebi noted.

Further, Kapoor has failed in maintaining expected operational transparency towards the company and stakeholder. Accordingly, the regulator imposed a "consolidated monetary penalty of total Rs 1 crore on the noticee, Rana Kapoor, for the violations of...the LODR (Listing Obligations and Disclosure Requirements) Regulations".


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp