YES Bank QIP : SEBI finds voilations

Shares of YES Bank turned flat after slipping over 4 per cent in trade on Thursday on news report that the market regulator Sebi has launched adjudication proceedings against the bank following the deferment of its $1 billion equity capital raise last month. yes bank Reacting to the news, the stock of YES Bank tanked as much as 4.06 per cent on the BSE. The Sebi has found reason enough to launch adjudication proceedings against Yes Bank over its abortive $1 billion qualified institutional placement. Last month, YES Bank launched a qualified institutional placement (QIP) to raise $1 billion, but following the alarming crash in the stock price, the bank scrapped the QIP within 24 hours after being launched.   Securities and Exchange Board of India (Sebi) found that Yes Bank had violated key norms of the listing obligations and disclosure rules (LODR) relating to misrepresentation of facts and adequate disclosure before it proceeded with the qualified institutional placement (QIP), the persons said on condition of anonymity. Investment bankers were also found wanting in due diligence, they said. SEBI Sections 29 (1) and 29 (2) of the LODR norms state that a company has to inform the stock exchanges at least two days in advance that it is holding a board meeting to consider fund-raising (including QIPs). It also has to give a two-day notice for a meeting that will decide the price of such fund-raising. Section 4(1) prohibits listed firms from misrepresenting facts; they have to ensure that information given to investors is not misleading.   YES Bank, through interviews by Chief Rana Kapoor, had claimed that this LODR, which came into force in December, meant the QIP had to be kept open for three days even if it was fully subscribed. This led to speculation that it did not find any takers, which saw prices plummeting. While the QIP price band was fixed at Rs 1,350-1,410, the price tanked below the lower end in Thursday’s trade. In the ensuing panic, the issue was deferred.

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