InvestorQ : What are the recent allegations of insider trading that Mr. Uttam Agarwal of Yes Bank board has made against the board of Yes Bank?
Debbie Mascarenhas made post

What are the recent allegations of insider trading that Mr. Uttam Agarwal of Yes Bank board has made against the board of Yes Bank?

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Crowny Pinto answered.
1 year ago
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It may be recollected that Mr Agarwal had resigned citing non-adherence to the governance standards by the Yes Bank board and the current CEO Ravneet Gill. Agarwal has asked SEBI to investigate whether the process followed by Gill had been law-compliant. In addition, three independent experts from the financial services industry had also expressed similar concerns about the bank and the possibility of insider trading based on information that is not yet public. Agarwal has clearly stated that the CEO had attempted to mislead the board of directors with false hopes of potential capital raising. Agarwal underlined that in all these instances, the CEO Gill had made promises without having any concrete proposal on hand.

In the case of specific names shared by Gill who wanted to buy into Yes Bank, Citax and Braich, there were no binding term sheets and no due diligence from legal experts or any investment bank. Agarwal highlighted that Ravneet Gill had downloaded from the internet copies of the balance sheets of Citax with paid-up capital of only £100. This had forced the board of directors not to bring such proposal nor announce such details till proper due diligence was done. Even the letters tabled by Gill were one page letters from investors and were more in the nature of expressions of interest (EOI), rather than a commitment. Also, the letters were undated, which defeats its legitimacy.

Agarwal said that considering the huge volatility in the stock prices around the time of the announcement, he had reasons to believe that the news management was a ploy to trade the volatility and has asked the SEBI to conduct a detailed investigation into the matter. In fact, Agarwal also suggested a forensic audit to investigate dissemination of misleading information. Agarwal has squarely blamed Gill for the state of affairs at Yes Bank and clearly hinted that the volatility created by the news flows was used by a syndicate of people to play the market profitably.

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