Yes Bank Slides 13% in Two Days as Bank’s Former Audit Committee Head Seeks Sebi Probe

Yes Bank Ltd shares have slid over 13% in the last two trading sessions after Uttam Prakash Agarwal, who resigned on Friday as independent director and head of the audit committee at the bank, sought an investigation by the Securities and Exchange Board of India (Sebi) into “illegal gains made by a certain set of people” due to dissemination of “false and misleading news”.

After closing 5.4% lower on Friday, Yes Bank shares further cracked as much as 8% in intra-day trade on Monday. At 11:04 am, the stock was trading at Rs 42, down 6.2% from its previous close.

Yes Bank’s independent director Uttam Prakash Agarwal had submitted his resignation on Friday morning citing “serious concerns” on the state of affairs of the private sector lender and deteriorating practices.

According to report, Agarwal has now written a letter to Sebi chairman Ajay Tyagi and wholetime member G. Mahalingam, asking the market regulator to investigate whether the process followed during the capital raising-plan by bank’s MD and CEO Ravneet Gill was law-compliant.

He also said that a probe must be conducted to find if the information provided to the board, disseminated to the public through a press release, and to stock exchanges and RBI was “false or misleading or distorted”. The former director also asked Sebi to investigate “the resultant illegal gains made by a set of people on account of non-compliances, false/misleading news”, and for fixing responsibility with appropriate fines, punishment and other measures.

Meanwhile, Yes Bank’s board on Friday approved raising Rs 10,000 crore of fresh capital via a mix of debt and equity. The board also decided to not proceed with the proposed investment offer of Erwin Singh Braich/SPGP Holdings, while it said it was open to considering the $500 million offer from Citax Holdings and Citax Investment Group in the next meeting.

After the board meeting, Morgan Stanley maintained ‘underweight’ call on the stock with a target of Rs 25 per share due to the continuing uncertainty around the quantum and pricing of capital-raising. The elevated asset quality stress will weigh on the stock price, it added.