Mumbai, March 12: The State Bank of India will invest Rs 7,250 crore at Rs 10 per share in Yes Bank.
In a filing to the stock exchanges today, SBI said its investment would be within the 49 per cent of Yes Bank’s paid-up capital.
“The executive committee of central board at its meeting held on March 11 accorded approval for purchase of 725 crore shares in Yes Bank at a price of Rs 10 per share subject to all regulatory approvals. SBI’s shareholding in Yes Bank will remain within 49 per cent of the paid up capital of Yes Bank,” State Bank of India said in its statement.
According to sources the central bank has already begun investigating BSR & Co — an affiliate of KPMG — the current auditors of Yes Bank. “There have been meetings of RBI officials and partners of BSR & Co about Yes Bank’s financial statements,” an RBI official said.
The auditors are required by law to point out anomalies in the books of accounts of companies they are engaged to audit.
Under RBI’s rules, auditors are required to red flag incidents of evergreening of loan books by banks. Financial institutions are known to move around funds among themselves in order hide the actual extent of non-performing assets and show good profits to keep the stock markets happy.
The bank’s NPAs further deteriorated to Rs 6,335 crore in the following year. However, since then the NPAs of Yes Bank are estimated to have ballooned by more than Rs 20,000 crore in 2018-19, according to the Enforcement Directorate which arrested its former CEO Rana Kapoor.
The actual extent of Yes Bank’s non-performing assets will be known only on Saturday when its financial results for the December 2019 quarter is announced, according to RBI officials.
Yes Bank’s auditors have a history of coming under the banking regulator’s scrutiny. Its previous auditor S R Batliboi & Co was banned for a year by RBI from carrying out audits for financial institutions over its audit of Yes Bank’s books.
According to sources here, investigators from the Enforcement Directorate will call in partners from Yes Bank’s audit firms for questioning in the coming days.
