Markets regulator, the Securities and Exchange Board of India (SEBI) on Wednesday ordered defreezing of bank accounts as well as share and mutual fund holdings of Former Yes Bank MD and CEO Rana Kapoor. Kapoor is currently in judicial custody after being arrested in March 2020 in the alleged Yes Bank fraud case.
Earlier in March, the markets regulator had attached bank accounts, share and mutual fund holdings of Kapoor to recover dues of over Rs 1 crore. The decision was taken after Kapoor failed to pay the fine imposed on him. In September last year, SEBI had levied a fine of Rs 1 crore on Kapoor for not making disclosures regarding a transaction of Morgan Credit, which was an unlisted promoter entity of Yes Bank.
The regulator stated in an order that by not disclosing about the transaction to Yes Bank’s board of directors, Kapoor ‘created an opaque layer between him and stakeholders and violated the provision of the LODR (Listing Obligations and Dislcosure Requirements) Regulation’.
SAT had accepted SEBI’s contention in imposing the maximum penalty as it found the offence of a serious nature since Kapoor at that time was serving as the Managing Director and CEO of the company.
The release order came after Supreme Court, on August 2, stayed the Securities Appellate Tribunal (SAT) order which had upheld a penalty of Rs 1 crore on Kapoor. The stay was subject to payment of Rs 50 lakh by Kapoor. Kapoor’s appeal in the apex court claimed that the imposed penalty was disproportionate as it wasn’t commensurate with the offence being alleged. The appeal questions how a provision containing a principle of interpretation became a charging provision that led to the imposition of a penalty.
In compliance with Supreme Court’s interim order, Kapoor has deposited the amount, the regulator noted. Accordingly, Sebi has also asked all banks in the country and depositories — NSDL and CDSL– “to release the bank accounts /locker, demat accounts and mutual fund folios of defaulter (Kapoor) attached if any pursuant to… the notice of attachment”.
It is worth noting that in February, the Securities and Exchange Board of India (Sebi) issued a demand notice to Kapoor, although he did not pay any dues. The pending dues, totalling Rs 1.04 crore, included an initial fine of Rs 1 crore and an interest of Rs 4.56 lakh and a recovery cost of Rs 1,000.
Meanwhile, a special court on Tuesday allowed Rana Kapoor’s lawyer to remain present during the recording of Kapoor’s statement by the Enforcement Directorate (ED) in a case related to the Avantha group. The ED is probing an alleged transaction between the Avantha Group of Companies’ promoter Gautam Thapar and Rana Kapoor and his wife.
Following Thapar’s arrest earlier this month, the probe agency had moved the special court for the Prevention of Money Laundering Act seeking permission to interrogate Kapoor in prison. On August 20, the court permitted the ED to interrogate Kapoor in judicial custody from Wednesday to Friday this week.Kapoor opposed the order, saying it was passed without hearing him.
