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Published On: Sun, Mar 8th, 2020

Yes Bank Chief Rana Kapoor sent to ED custody till March 11

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3Rana_Kapoor_1NEW DELHI / MUMBAI : In mounting trouble for Yes Bank founder Rana Kapoor, who was arrested by the Enforcement Directed early Sunday morning, the Central Bureau of Investigation (CBI) has now stepped in and begun its probe in the matter.

While officials at the probe agency did not make public the nature of the probe, the CBI will now investigate the case against Dewan Housing Finance Limited (DHFL), its promoter Kapil Wadhawan and Rana Kapoor for alleged case of cheating and criminal conspiracy.
The CBI – persons familiar with the development said – is probing the links on how Kapoor had entered into a “criminal conspiracy with Kapil Wadhwan” for extending financial assistance to DHFL through Yes Bank in lieu of substantial undue benefit.

Rana Kapoor, the founder and former managing director of crisis-hit Yes Bank, was sent to the custody of the Enforcement Directorate until Wednesday by a court in Mumbai on Sunday following his arrest on money-laundering charges while the Central Bureau of Investigation (CBI) filed a separate case against him for corruption.
The Enforcement Directorate (ED) arrested Rana Kapoor early on Sunday after hours of interrogation and searches at his and his daughters’ residences in Delhi and Mumbai. The 62-year-old broke down when he was produced in a Mumbai court.
ED’s lawyer Sunil Gonsalves said at the hour-long hearing the total proceeds of the alleged crime amounted to Rs 4,300 crore, and that Rana Kapoor had refused to cooperate with the investigation.

Rana Kapoor denied this. “I want to cooperate with them,” he told the court through tears. “I’m willing to cooperate day and night despite the fact that I haven’t slept a wink.”
His lawyer Zain Shroff told the court his client had been made “a scapegoat” due to public outrage against Yes Bank after the Reserve Bank of India (RBI) placed the bank under a moratorium and imposed a Rs 50,000-limit on withdrawals.
The probe agency has filed a case against Dewan Housing Finance Limited (DHFL), its promoter Kapil Wadhawan and Rana Kapoor for an alleged case of cheating and criminal conspiracy under relevant sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act, persons familiar with the development said.

The move comes just months after the board of Yes Bank had recommended a CBI probe, in December. As investigation agencies have begun cracking down on Rana Kapoor, the ED is also probing investments worth over Rs2000 crore, along with 44 expensive paintings and more than 12 alleged shell firms against the Yes Bank founder.
While a PMLA court in Mumbai remanded Kapoor to ED custody till 11 March, the CBI is also likely to conduct searches in connection with its probe.  On Friday, the ED searched Kapoor’s residence in south Mumbai.
At the same time, the central probe agency is also investigating his wife and daughters for allegedly having received Rs 600 crore funding for the firm controlled by them, from an entity linked to the scam-hit Dewan Housing Finance Limited (DHFL).
At the heart of its investigation, the ED is also probing the existence of multiple shell companies used by the Kapoors to divert funds received through multiple kickbacks.
On Sunday evening, RanaKapoor’s daughter Roshni Kapoor – who was also being probed by the ED – was stopped from leaving the country at the Mumbai Airport, while on her way to London.
Worried customers of Yes Bank stand in a queue to withdraw money after the RBI capped withdrawals at Rs 50,000. Weighed down by an increasing pile of bad debt, Yes Bank tried unsuccessfully for months to raise the capital it needs to stay above regulatory requirements.
On Thursday, RBI took control of Yes Bank and said it would work on a revival plan. State Bank of India (SBI) said on Saturday it would invest funds to buy a 49 per cent stake in Yes Bank as part of the initial phase of a rescue deal for the troubled lender. Last week finance minister Nirmala Sitharaman said Yes Bank had granted loans to entities including bankrupt Dewan Housing and Finance Ltd (DHFL).
The bank is the third significant Indian financial institution to unravel in the last six months, following the RBI’s moves to take control of Dewan Housing and Punjab & Maharashtra Co-operative Bank.
In the court on Sunday, picking up from a First Information Report or FIR prepared by the CBI, the Enforcement Directorate lawyer alleged that Yes Bank had bought Rs 3,700 crore worth debentures of Dewan Housing, which had granted a Rs 600 crore loan to a company called Doit, owned by Rana Kapoor’s three daughters Roshni Kapoor, Rakhee Kapoor Tandon, and Radha Kapoor.

The Enforcement Directorate lawyer also said that the loan to Doit was extended against a collateral of Rs 700 crore, while the actual value of the assets is just Rs 40 crore. Citing the irregularities in its FIR, the CBI has filed a First Information Report or FIR against Rana Kapoor, Dewan Housing and Doit for alleged criminal conspiracy, cheating and corruption.
Officials from the CBI’s Economic Offence unit have left for Mumbai to conduct searches and question Rana Kapoor and others, sources said. The agency will seek his custody after ED, they added.
(With Inputs from Mumbai Bureau ).

 

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