De-freezing of Demat and Mutual Funds Portfolio of Rana Kapoor

In line with the Supreme Court ruling on the subject, SEBI has ordered de-freezing of the investment accounts of Rana Kapoor, former MD and CEO of Yes Bank. In Mar-20, when RBI had superseded the management of Yes Bank, the ED had initiated money laundering investigations against him. Based on the findings, Rana Kapoor was taken into judicial custody where he still remains.

The fine of Rs.1 crore was imposed on Rana Kapoor by SEBI, which was towards opaque reporting. Rana Kapoor had not made disclosures pertaining to transactions of Morgan Credit, which was an unlisted promoter company of Yes Bank. 

SEBI’s contention was that this failure to disclose was in contravention of the Listing Obligations and Disclosure Requirements (LODR). Since Rana Kapoor had not paid the fine of Rs.1 crore, it had ordered his bank accounts, lockers, Demat accounts and mutual fund holdings to be frozen.

Rana Kapoor had subsequently approached the Securities Appellate Tribunal (SAT) against the SEBI order, but SAT had upheld the order. Subsequently, Kapoor approached the Supreme Court against the order. While Supreme Court has reserved its final judgment, it ordered a stay on the SAT order, subject to Kapoor depositing Rs.50 lakhs with the court.

Post the order by the Supreme Court on 02 August, Supreme Court confirmed having received the amount of Rs.50 lakhs from Kapoor against the stay on freezing of his investments. Since Kapoor had met the conditions imposed by Supreme Court, SEBI has ordered de-freezing of Kapoor’s bank accounts, lockers, demat and mutual fund holdings.

Accordingly, SEBI has intimated all the banks, depositories (NSDL and CDSL) and the mutual fund registrars to release the freeze on all bank, equity and Mutual fund accounts of Rana Kapoor. However, investigations into the money laundering and other allegations of malpractices by the ED will continue. The total dues, including interest, stand at Rs.1.04 crore.