Sebi on Tuesday sent a notice to Yes Bank’s former MD and CEO Rana Kapoor, asking him to pay Rs 2.22 crore in a case of mis-selling the private sector lender’s AT1 bonds and warned of arrest and attachment of assets as well as bank accounts if he fails to make the payment within 15 days.

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Kapoor has been in jail since March 2020 in connection with the DHFL money laundering case.

The demand notice came after Kapoor failed to pay the fine imposed on him by the Securities and Exchange Board of India (Sebi) in September 2022. In a notice, Sebi directed Kapoor to pay Rs 2.22 crore, which includes interest and recovery costs, within 15 days.

In the event of non-payment of dues, the market regulator will recover the amount by attaching and selling his moveable and immovable property. Besides, Kapoor faces attachment of his bank accounts and arrest.

In September 2022, the regulator imposed a penalty of Rs 2 crore on Kapoor in the matter.

The case relates to mis-selling of the bank’s AT1 (Additional Tier-1) bonds to retail investors by the bank’s officials. It was alleged that the bank and certain officials did not inform investors of the risk involved while selling the AT-1 bonds in the secondary market. The sale of AT1 bonds started in 2016 and continued till 2019.

In its order, Sebi stated that Kapoor was overseeing the entire operation relating to the secondary sale of AT-1 bonds, taking regular updates from the team and giving them further instructions to increase the sales, thus creating pressure on the officials to ramp up the sales.

Further, the regulator stated that Kapoor was responsible for acts of misrepresentation or suppression of material facts, manipulation and mis-spelling of AT-1 bonds of Yes Bank to individual investors.

Also, Kapoor pressured officials of the private wealth management team to devise a devious scheme to dump the AT-1 bonds on hapless customers of Yes Bank.