A special court in Mumbai on Monday extended the custody of Rana Kapoor, co-founder of Yes Bank, till 20 March, after the Enforcement Directorate (ED) claimed the case is a large-scale fraud involving public money.
“We are trying to find out the illegal transactions and the layering for such loans," additional solicitor general Anil Singh, appearing for the investigative agency, informed the prevention of money laundering (PMLA) court. While the ED sought a six-day custody, it was allowed a four-day custody till 20 March.
Kapoor, his family members and others are accused of laundering ₹4,300 crore by receiving alleged kickbacks in exchange for lending heavily to big borrowers, loans which soured later.
According to ED, Yes Bank gave loans of ₹202 crore in tranches till 2016 to Mack Star Marketing, a joint venture between Housing Development Infrastructure Ltd and Ocean Deity Investment Holdings to redevelop a building that was already constructed two years earlier at a cost of ₹100 crore.
This money was then routed to HDIL’s accounts with Yes Bank and used to pay HDIL’s loans, ED informed the court. Kapoor allowed this evergreening of loans by HDIL and the loan was sanctioned despite objections from Ocean Deity Investment Holdings, the majority JV partner.
The investigative agency is also looking into the 40 Amrita Shergill Marg property purchased by Rana Kapoor’s family company Bliss Abode for ₹378 crore through a loan from Indiabulls Housing Finance.
Appearing for Kapoor, Satish Maneshinde said a witch hunt was on against the Yes Bank co-founder. He said public sector banks have more bad loans but action was not taken against their officials and directors. He added that former Reserve Bank of India (RBI) deputy governor R. Gandhi, appointed to the Yes Bank board in May last year, was in discussions with Kapoor regarding taking charge of Yes Bank until his sudden arrest on 5 March.
Jayshree P Upadhyay & Gopika Gopakumar in Mumbai contributed to the story