Finance
By: Shree1news, 12 APR 2021
MUMBAI : India’s market regulator on Monday fined Yes Bank Ltd ₹25 crore ($3.33 million), saying it had fraudulently sold certain dangerous bonds to mom-and-pop investors with out the necessary warnings and risk assessments.
Yes Bank “deliberately misrepresented” its so-called AT1 bonds as being more attractive than fixed deposits by suppressing risks and distorting information, manipulating customers into investing in these risky assets, the Securities and Exchange Board of India (SEBI) stated in an order.
A revival plan for debt-laden Yes Bank last year noticed its AT1 bonds totally written down, hurting many retail investors. Yes Bank had about ₹8,800 crore ($1.2 billion) in AT1 capital as of March 2019.
There was “clear mala fide intent” on the part of Yes Bank in selling the bonds to its prospects, including these with a low risk appetite and those of very advanced age, SEBI stated.
Yes Bank declined to comment.
The lender, in its submission to SEBI, stated the risk factors were communicated to investors either orally or in written documents.
Yes Bank also stated that there was no need to assess the risk profile of prospective investors as AT1 bonds have been considered low risk given that there was no indication on the time that the bank would fail and the bonds would have to be written down.
Source:A-N
