Former head of the audit committee of the Yes Bank board Uttam Prakash Agarwal has filed a complaint with the Securities and Exchange Board of India (SEBI) seeking a probe into "the illegal gains made by a certain set of people" in giving misleading information to the markets and the people on potential investors, including Citax and Erwin Singh Braich.

Though Agarwal, who recently resigned as the independent director from the Yes Bank board and head of the audit committee, has not spelled it out, it implies to insider- trading, which needs to be investigated by SEBI.

In a letter to SEBI Chairman Ajay Tyagi and Wholetime Member G Mahalingam, Agarwal, former president of the Institute of Chartered Accountants of India (ICAI), has revealed the chain of events when Yes Bank was evaluating potential investors.

The copy of the letter is also marked to Reserve Bank of India (RBI) Governor Shaktikanta Das, Secretary of the Ministry of Corporate Affairs Injeti Srinivas, NSE Managing Director and CEO Vikram Limaye, and BSE Managing Director and CEO Ashish Chauhan.

The NSE has acknowledged the receipt of the letter. Agarwal has asked SEBI to investigate whether the process followed by MD and CEO Ravneet Gill had been law-compliant.

He has also sought a probe if the information provided to the board, disseminated to the public through a press release, and to the stock exchanges and the RBI "are false or misleading or distorted".

Agarwal has also raised the question if the whole process influenced decision of investors on account of dissemination of false and misleading news, which may have enthused sale or purchase of securities.

Even more serious is the former director''s demand for a probe into "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.

According to the compliant, the Yes Bank management first didn''t share names of potential investors with the board members and when it did in the form of Citax and Braich, these were not binding term sheets devoid of details and without any due diligence from legal experts or investment bank.

Following pressure from the board members, Agarwal alleges, Gill downloaded from the internet a copy of balance sheet of Citax with paid-up capital of only 100 pounds at which the aghast members insisted that no such misleading information on investors putting in billions of dollars should be shared with the public or the regulatory authorities.

"In addition to the two term sheets, CEO/MD tabled three more single-page letters from different investors, namely Rekha Jhunjunwala (undated), Ward and Ferry and Discovery Capital. They were expressions of interest (EoIs) and not commitment," he said.

On the basis of a letter issued by Prime Securities (previously banned by SEBI), stating that it will find out interest of investors in the UK was a clear ploy by the MD/CEO to salvage commitments made to the board and given to the public.

In view of the management''s failure to oversee capital raising, the "board set up an empowered committee to suggest alternative and corrective ways to deal with the situation, which was caused by the inefficiencies and failure on the part of the CEO," Agarwal said.

Agarwal also suggested a forensic audit to investigate dissemination of misleading information, but no such action was taken.

IDFC Securities, Ambit Capital and Avendus made presentations to the empowered committee of the board and agreed on the concerns expressed. Regulators should bar any board meetings on capital till legitimate and investors are presented, they said.