Capital markets regulator, Securities and Exchange Board of India (SEBI), has ordered the defreezing of bank accounts, share and mutual fund holdings of former Yes Bank MD and CEO Rana Kapoor, who has been in prison since March 2020 in connection with the DHFL money laundering case. SEBI had sent a notice to Kapoor in July which has been stayed by the Securities Appellate Tribunal (SAT), leading to the order to defreeze Kapoor’s accounts.
In July, SEBI had sent a notice to Kapoor asking him to pay Rs 2.22 crore in a case of misselling Yes Bank’s Additional Tier-1 (AT1) bonds. It had warned him of arrest and attachment of assets as well as bank accounts if he failed to make the payment within 15 days. It sent a demand notice in September 2022 after Kapoor failed to pay the fine of Rs 2 crore imposed on him by the regulator.
In September the regulator attached the bank as well as demat accounts along with the mutual funds folios of the defaulter.
The release order came after SAT, through a ruling on September 12, granted an interim stay on the SEBI order in the case of misselling the private lender’s AT1 bonds.
SAT directed Kapoor to deposit a sum of Rs 50 lakh within six weeks, which he paid in compliance with the order within the timeline. The matter has now been listed for a final hearing on November 20.
SEBI asked all banks, mutual funds and depositories – CDSL and NSDL – in a notice, to "release the bank account(s), locker(s), demat account(s), mutual fund folio(s) of the defaulter (Kapoor) attached".
The SEBI order had stated that Kapoor was overseeing the entire operation relating to the secondary sale of AT1 bonds and had created pressure on officials to ramp up sales. It also blamed Kapoor for acts of misrepresentation or suppression of material facts, manipulation and misselling of AT1 bonds of Yes Bank to individual investors. SEBI pressured officials of the private wealth management team to devise a scheme to dump the AT1 bonds on Yes Bank customers.
