Delhi HC asks Centre, RBI to respond to Subramanian Swamy’s plea for probe into Yes Bank’s assets’ transfer
The plea has been filed in the context of the transfer of a distressed asset portfolio worth Rs 48,000 crore from Yes Bank to JC Flowers last year
Subramanian Swamy, in the plea, claims that he wishes to highlight the “growing rot” prevalent in the private banking sector. (File Photo) Former Rajya Sabha MP Subramanian Swamy has moved the Delhi High Court seeking the constitution of an expert committee by the Centre to look into the transfer of Rs 48,000 crore assets of Yes Bank to asset reconstruction company JC Flowers, claiming that it attempts to evade laws and lacks fairness.
A division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad on Friday sought responses from the Centre, Reserve Bank of India, Securities and Exchange Board of India, Yes Bank and JC Flowers Asset Reconstruction Private Ltd. However the court did not issue a formal notice, granting the parties time to file a response in four weeks, and listed the matter on July 14.
The public interest litigation plea seeks a direction to the Centre, SEBI and RBI to formulate proper and comprehensive guidelines in accordance with the recommendations of the committee to check any such future transactions and to regulate the arrangements entered into between banks or other financial institutions and asset reconstruction companies.
The plea has been filed in the context of the transfer of a distressed asset portfolio worth Rs 48,000 crore from Yes Bank to JC Flowers last year.
“As per the information available in the public domain, the transactions involving the transfer of the distressed asset portfolio from Yes Bank to JC Flowers lack fairness, attempts to evade relevant laws, and do not serve the best interests of the general public who have accounts with Yes Bank,” the plea states.
The plea states that this transfer is connected to another transaction in which Yes Bank has acquired up to 19.9% stake in JC Flowers. The plea states that the petitioner is “worried, based on media reports, disclosures by Respondents No. 5 (JC Flowers), and certain legal provisions, that these transactions lack impartiality, attempt to bypass relevant laws, and are not in the best interest of the general public” who have accounts with Yes Bank.
The plea states that “these transactions were made to benefit” only JC Flowers, “at the expense of” Yes Bank’s customers and shareholders and “are harmful to the economic well-being of the country and do not prioritise the recovery of public funds”.
Swamy in the plea claims that he wishes to highlight the “growing rot” prevalent in the private banking sector, which has been further “accelerated by perpetual decay of corporate governance and ethical standards” prevailing in the private banking industry and asset reconstruction industry.
The plea seeks immediate action on these transactions to “avoid the conclusion of this suspicious deal”. Swamy claims in the plea that such transactions affect the financial health of the country as public money is being manipulated and passed around in a circular manner “trifling with the investors’ trust while also bypassing the guidelines set by the RBI”.
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