Sebi on Friday imposed a penalty of Rs 1 crore on Rana Kapoor, former managing director and CEO of Yes Bank, for not making disclosures about Morgan Credit’s transaction.

By not disclosing the transaction to Yes Bank’s board of directors, Kapoor has created an opaque layer between him and the stakeholders, Sebi said in an order.

Morgan Credit 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 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 has provided a “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” from the board of the bank and the same has directly impacted the lender in terms of market capitalisation.

London property

The Enforcement Directorate has attached a Rs 127-crore flat of Kapoor in London in connection with a money laundering investigation against him and others.
The agency issued a provisional order for attaching the property — Apartment 1, 77 South Audley Street, London — under the Prevention of Money Laundering Act.