The Enforcement Directorate (ED), which arrested former Yes Bank Chief Executive Officer (CEO) and Managing Director Rana Kapoor on March 8 for disbursing loans to various firms for pecuniary gains, is now investigating debentures and loans to the tune of ₹5,402.1 crore that the bank had given to the Dewan Housing Finance Limited (DHFL), its group companies and Sumer Group. Based on the submissions by the ED, the court granted the agency custody of Mr. Kapoor till March 20.
ED’s counsel Anil Singh, additional solicitor general, informed the special Prevention of Money Laundering Act court that the bank had invested ₹3,700 crore in short-term debentures of the DHFL between April to June, 2018.
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For the debentures, Mr. Kapoor and his family members got a kickback of ₹600 crore from Kapil Wadhawan, promoter of the DHFL, who paid the sum to DOIT Urban Ventures (India) Pvt Limited under the garb of repayment of ₹300 crore for a loan taken earlier, and the rest for general purposes.
The loan was given on the basis of five properties whose value was inflated from₹ 39.66 crore to ₹735 crore under the assumption that the 7.79 acres at Alibaug and 91.63 acres at Raigad could be converted from agricultural to residential by obtaining approval from local authorities, and thereby use it for construction and eco-tourism activity.
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The ED found that the DOIT was in the name of Mr. Kapoor’s daughters Roshini Kapoor, Radha Kapoor Khanna and Raakhee Kapoor Tandon, and it also found that the daughters had never dealt with the firm and only Mr. Kapoor did the dealings of the DOIT.
The ED also informed the court that the Yes Bank had sanctioned a loan of ₹750 crore to RKW Developers Private Limited, a group company of the DHFL, for their Bandra Reclamation project and that the entire sum was siphoned off by Mr. Wadhawan.
The loan of ₹750 crore was taken by Belief Realtors, an RKW group company, which was immediately transferred to KYTA Advisors Private Limited through three group companies of Dheeraj Realty, and KYTA Advisors transferred the full amount to RIP Developers Private Limited which transferred the whole amount to the DHFL immediately. Once the DHFL received the ₹750 crore loan, it then sanctioned a loan to the Radius Group and the Paresh Shah Group, who in turn, paid ₹450 crore from the monies received from the DHFL, to the Yes Bank for repayment of earlier loan to these companies, claimed the ED.
It also told the court that the Yes Bank had sanctioned a loan of ₹202.1 crore, in parts, to one Mack Star Marketing Private Limited, a joint venture of De Shaw Group and promoters of HDIL Group — Sarang Wadhawan, Rakesh Wadhawan and Waryam Singh. The whole amount of loan sanctioned by the bank was siphoned on to the HDIL group companies and this amount was used for payment of earlier loan taken by the HDIL to the Yes bank. The said loans were on the verge of becoming non-performing assets (NPA).
Mr. Singh said, “It is clearly established that Mr. Kapoor in connivance with Wadhawans had sanctioned the loan of ₹202.1 crore, without permission of the investor, and received back the almost whole loan money in Yes bank with sole intention to avoid NPA/Insolvency of HDIL getup companies whose promoters viz the Wadhawans were in very close relationship with Mr. Kapoor himself.”
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The agency also claimed that Mr. Kapoor had obtained illegal gratification in the property deal with Avantha Reality Private Limited owned by Gautam Thapar at a much lesser price than the prevalent market price. The agency claimed that the property was purchased by Bliss Abode Private Limited for ₹90 crore where Mr. Kapoor’s wife is one of the directors. The agency claimed that that, no transparent process of sale of the charged property was initiated by the bank.
The ED claimed that the property was under mortgage with the ICICI bank for a loan of ₹350 crore and also with the DCB bank for a loan of ₹50 crore. The agency claimed that Kapoor had sanctioned a loan of ₹400 crore to the Avantha Reality Private Limited as lease rental discounting for 10 years. The agency told the court that the valuation of the property at the time of sanction was at ₹550 crore.
Advocate Satish Maneshinde appearing for Mr. Kapoor said there are so many public banks that had NPAs which constitute 98% of it and the Yes Bank had less than 2% of NPAs. He questioned, “Why am I being singled out? This is a witch hunt.”
