A special Prevention of Money Laundering Act (PMLA) court on Wednesday granted the Enforcement Directorate (ED) an extension of Yes Bank co-founder Rana Kapoor’s custody till March 16. The prosecution sought the extension citing his interrogation with regard to several other loan sanctions amounting to ₹30,000 crore.
The ED claimed that the former Yes Bank MD and CEO was involved in transactions involving 78 companies owned by him and his family, and sanctioned loans of up to ₹30,000 crore during his tenure at the bank.
The former Yes Bank co-founder was arrested by the ED on Sunday under provisions of the PMLA and was remanded in custody till March 11. A case with the CBI was also lodged after documents pertaining to loan sanctions to several entities were recovered during a DHFL-related probe, which was conducted at Mr. Kapoor’s residence on March 7.
“During investigation, the amount of the loans sanctioned was found to have gone up from ₹4,300 crore to ₹30,000 crore. Of the ₹30,000 crore, ₹20,000 was turned into non-performing assets (NPAs). Where have these loans gone? The flow of transaction needs to be probed in detail. How has the money been siphoned off? The amount and documents are also voluminous and need to be looked into deeply. The ED is calling key management persons, and we need more time to question the witnesses who need to be confronted with Mr. Kapoor,” the ED counsel, Sunil Gonsalves, said.
The defence lawyer argued that Mr. Kapoor was being made a scapegoat and that the investments were not connected, claiming that the NPAs of the company when he (Mr. Kapoor) left were only 1%.
“In the last two years since he has left the company, the market capital value of Yes Bank has fallen from ₹93,000 crore to ₹5,000 crore. The present management cannot hold him responsible if the company is unable to recover its loans,” advocate Satish Maneshinde representing Mr. Kapoor said.
Mr. Maneshinde told the court that the three loans during 2017-2018 were issued before the issue of debentures, which were only opened up from May 22 to June 4, so the issue of them being used as kickbacks did not arise. “We have already paid an interest of up to ₹130 crore and can fully repay the loan amount of ₹600 crore which is due by 2023.”
On being accused of maintaining shell companies, the defence lawyer said that all investments had been audited and there were no exceptions listed by auditors. “We have all documents as proof. We can give details of where the ₹600 crore was spent — ₹174 crore has gone into a design school, and there are other investments in real asset companies, healthcare and wellness companies among others, which can all be accounted for with proof.”
The counsel for ED concluded arguments and said whether they had bungled or not came at the trial stage, not the remand stage. “Right now it looks like they have received kickbacks through their companies. It is a quid pro quo situation and divergence needs to be investigated,” Mr. Gonsalves said.
Upon hearing the arguments from both sides, Judge P.P. Rajvaidya ordered an extension until March 16 and asked the parties to appear for further arguments on the same day post lunch.
