Yes Bank proposes name for Dish TV board which was under SEBI scanner

Among the names proposed by Yes Bank for Dish TV includes Sanjay Nambiar who has just settled the case with market regulator SEBI. Nambiar along with Yes Bank and 5 others has settled a case with SEBI after paying Rs 1.65 crore towards settlement amount. The case pertaining to alleged selective disclosure of asset quality.  

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The regulator conducted an investigation in the affairs of Yes Bank during February 2019 to ascertain the possible violation of provisions of SEBI Act and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices). Pursuant to the investigation, SEBI observed certain violations were allegedly committed by the bank and the six persons and issued show cause notice to them in this regard in October 2020.

In the show cause notice, it was alleged that Yes Bank made a selective disclosure on February 13, 2019, highlighting "nil" divergence which had significant positive impact on the price movement and had not disclosed other issues mentioned in the Risk Assessment Report (RAR) as observed by RBI such as lapses and regulatory breaches in various areas of its functioning.

It was alleged that announcement made by Yes Bank to exchanges were "incomplete as only selective disclosures highlighting nil divergence in bank's asset classification and provision from RBI norms were disclosed as per the RAR of RBI." "However, other lapses and regulatory breaches in various areas as identified in the RAR were not disclosed," SEBI order noted.

Pursuant to the investigation, SEBI observed certain violations were allegedly committed by the Yes Bank and the six persons and issued show cause notice to them in this regard in October 2020.

The announcement resulted in misleading the investors as the price of the scrip increased by around 30 per cent and volume of trading the scrip also increased substantially the next trading day February 14, 2019.

It was alleged that the bank and six persons, who were involved in the decision making process to make the information public, have violated the provisions of PFUTP norms. The six persons were either a member of the Reputational Risk Management Committee (RRMC) or part of the decision making process in relation to the disclosures made on February 13, 2019. Pending adjudication proceedings,  entities approached SEBI to settle the proceedings initiated against them "without admitting or denying the findings of fact and conclusions of law", through a settlement order.  

Thereafter, SEBIs committee recommended that the case may be settled upon payment of Rs 1.65 Cr by applicants on jointly and several liability basis and accordingly they remitted the amount.  

Its not known that what action has been taken by the board of the bank against the individuals who were under SEBI scanner for securities law violations, but interestingly one of the names has been proposed by Yes Bank for Dish TV board.