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Mumbai, March 8, 2020
A teary-eyed Yes Bank founder Rana Kapoor denied any wrongdoings leading to the private bank's current financial crisis as a special court on Sunday sent him to the Enforcement Directorate's (ED) custody till March 11.
Kapoor was arrested around 4 a.m. after intensive grilling by ED sleuths for nearly 30 hours and produced before the holiday court for seeking a five-day remand. He has been charged under various provisions of the Prevention of Money Laundering Act and others.
ED counsel Sunil Gonsalves informed the court that it had registered a fresh case against Kapoor and the ex-promoters of Dewan Housing Finance Ltd (DHFL).
He contended that Yes Bank had bought debentures worth Rs 3,700 crore from DHFL against which the company was granted loans worth Rs 600 crore against a collateral security of around Rs 40 crore.
The ED said that the proceeds from the crime stood at Rs 4,300 crore of public money, and DHFL had given the Rs 600 crore loan to DoIt Urban Ventures India Pvt. Ltd. (DUVIPL) of which Kapoor is a founder and his daughters are 100 per cent shareholders.
The ED counsel further argued that the value of the property mortgaged with DHFL was inflated to Rs 750 crore against the cover-up loan of Rs 600 crore to DUVIPL, and the money laundered by Kapoor was used for personal purposes and thus there was allegedly a criminal conspiracy between Kapoor and the DHFL in the deal.
The ED sought his custody as they wanted to establish the role of Kapoor and his family members and confront them in the matter.
Defending himself, Kapoor said that DHFL was an AAA-rate company, while there an interest of Rs 130 crore on the performing loan taken by his daughters' company (DUVIPL) which had a capital of Rs 300 crore.
At one point, claiming no wrongdoings, Kapoor broke down, saying there was no delay in repayments to DHFL, even as the ED argued that the DUVIPL had no proper businesses.
Opposing the ED plea on medical grounds, Kapoor's lawyer argued that no forensic audits have been carried out into the Yes Bank's books of accounts and the ED was selectively targeting him (Kapoor) in view of the public anger.
Seeking custody till March 13, the ED said that Kapoor was not cooperating with the investigations, but the beleaguered banker said he was under medical treatment after he lost the Yes Bank.
He assured that he was not planning to flee anywhere, and the ED could take away his passport. The ED has reportedly returned his passport on Sunday morning.
In a series of swift developments in the past four days after RBI superseded the Yes Bank board and imposed stringent restrictions on its operations, ED sleuths raided Kapoor's home in Samudra Mahal residence in Worli over the past two days.
On Saturday, he was taken to the ED Office at Ballard Pier for detailed investigations and overnight interrogation before placing him under arrest early on Sunday.
The raids specifically are vis-a-vis dealings with DHFL, whose founders are brothers Dheeraj Wadhawan and Kapil Wadhawan.
Besides Kapoor, the accounts of his wife Bindu and their three daughters -- Rakhee Kapoor-Tandon, Roshni Kapoor and Radha Kapoor -- are also under the ED scanner.
Incidentally, Kapil and Dheeraj Wadhawan's uncle Rakesh Wadhawan and their cousin Sarang Wadhawan are among the prime accused who were arrested in the Punjab and Maharashtra Co-operative Bank (PMC Bank) scam which collapsed in September 2019.