SEBI FINES YES BANK ₹25 CR IN AT-1 BONDS CASE

Markets regulator Sebi on Monday imposed a penalty of ~25 crore on YES Bank in the matter of misselling the lender’s AT-1 bonds a few years ago.

In addition, the watchdog has imposed a fine of ~1 crore on Vivek Kanwar, who was heading the private wealth management team, and ~50 lakh each on Ashish Nasa and Jasjit Singh Banga.

The two individuals were part of the private wealth management team at the time of violation.

They need to pay the penalty within 45 days, Sebi said in its order.

YES Bank and certain officials devised the “devious scheme to dump the AT-1 (Additional Tier-1) bonds on their hapless customers”, the regulator noted.

In order to make institutional investors subscribe to more capital of YES Bank, the noticees devised the plan to down sell the AT-1 bonds, held by the institutional investors, to individual investors, including their customers. In this regard, they highlighted the AT-1 bonds as earning high interest vis-a-vis the Fixed Deposits (FDS), Sebi said.

Noticees refers to YES Bank, Kanwar, Nasa and Banga. During the process of selling of the AT-1 bonds, individual investors were not informed about all the risks involved in subscription of these bonds.

“The omission on the part of the noticees to forward relevant documentary information to the investors/ customers indicates suppression of material facts so as to create a misleading appearance of the AT-1 bonds in order to lure the investors/customers to invest in them,” it said.