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The Enforcement Directorate has claimed that Rana Kapoor, co-founder of Yes Bank, and Kapil and Dheeraj Wadhawan, promoters of Dewan Housing Finance Limited (DHFL), have siphoned funds worth Rs 5,050 crores through shady transactions.
In March 2020, Mr. Kapoor was arrested and held under the Prevention of Money Laundering Act and was refused bail several times. In April 2020, both Wadhawan brothers were picked up in relation to the Yes Bank investigation and then arrested in May 2020.
In September 2021, Rana Kapoor's wife and daughters were jailed as well. All family members were bailed out on a later date.
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During the investigation by ED, it was revealed that the funds were siphoned to offshore accounts and could not be attached to the case. The ED said the investigation has revealed that Yes Bank had bought debentures worth Rs 3,700 crore between April 2018 and June 2018 from DHFL. Therefore, the amount was transferred to DHFL.
Subsequently, DHFL gave a loan of Rs 600 crore to DOIT Urban Ventures Pvt Ltd (an entity, beneficially owned by Rana Kapoor and his family). The probe also revealed that Yes Bank had used public money for the purchase of debentures of DHFL, which have not yet been redeemed by DHFL.
On the other hand, DHFL obliged Kapoor by giving the so-called loan of Rs 600 crore to his beneficially-owned company, namely DUVPL, without adequate collateral, the agency said. However, the loans were given against substandard properties worth only around Rs 39.68 crores artificially inflated to Rs 750 crores. And since DUVPL does not have any transactions to date, it will not be able to repay the loans.
Rana Kapoor and Wadhawan brothers are currently in judicial custody. The Yes Bank share is barely avoiding the tag of a penny stock as it closed at Rs 13.95 per share, fairly close to opening prices in 2006 when it was listed.
Article by Aman Agarwal.
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