Private sector lender, Yes Bank witnessed selling bias on Tuesday's trading session after the Securities Appellate Tribunal (SAT) has imposed an interim stay on the market regulator Sebi's Rs25cr penalty on the bank for the alleged misselling of AT1 Bonds in the secondary market.
At around 10.59 am, Yes Bank was trading at Rs13.62 per piece down by 1.7% on Sensex. The stock was trading at the day's low.
The interim order comes after when Yes Bank intimated the tribunal about its plan to pay the penalty amount within two weeks from the date of the order, in case its appeal is turned down.
The SAT wrote in its order that the question on whether the buyers were informed of the risk factor concerning the AT-1 bonds can be best explained by the relationship managers who were part of the investigation but were not noticees in these proceeding.
The tribunal also noticed that the risk factor was already existing on the website, and it was in the knowledge of everyone. Taking into consideration, prima facie a case is made out for grant of an interim order.
SAT has asked the market watchdog to submit its reply within four weeks and the bank to file its rejoinder to Sebi.
The case will be again heard on July 30.
Last month, Sebi imposed a penalty of Rs25cr against the Bank under Section 15 HA of SEBI Act, 1992 for the alleged misselling of AT1 Bonds in the secondary market.
As per the regulatory filing, Yes Bank had issued Additional Tier 1 Bond (“AT1 Bonds”) in three tranches (issued in the year 2013; 2016 & 2017) in compliance with the Applicable Regulations. According to the reconstruction of the Bank in March 2020 under section 45 of the Banking Regulation Act, 1949, the Bank had vided order of Administrator of the Bank, written down two tranches, i.e., AT1 Bonds issued in 2016 & 2017; in due compliance with the RBI Regulations and the relevant provisions in the Information Memorandum(s) for the said AT1 Bonds.
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