The Enforcement Directorate on Monday (March 16) told a special court in Mumbai that over ₹202 crore as loan was sanctioned by Yes Bank to a joint venture company of HDIL group to repay previous dues, during Rana Kapoor’s tenure.
The former MD and CEO of Yes Bank, who was arrested by the agency on March 8 under provisions of the Prevention of Money Laundering Act (PMLA), was produced before the special court on Monday after his remand ended.
The 62-year-old banker was initially remanded to ED custody till March 11 for allegedly not cooperating in the probe related to the crisis at bank he co-founded after the RBI placed it under a moratorium.
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Additional solicitor general Anil Singh, appearing for the central agency, sought six more days of remand for Kapoor as they need to probe him further in connection with the case, in the special court headed by judge PP Raj Vaidya.
The ED told the court that its investigations has revealed that Yes Bank had sanctioned ₹202.1 crore loans in parts, to one Mack Star Marketing, a joint venture of De Shaw Group and promoters of HDIL Group.
The agency further alleged that almost the whole amount was siphoned off by the HDIL group in the sense that the company used the entire loan to pay its earlier loan from Yes Bank and thus help it avoid being declared an NPA.
The investigating agency said De Shaw Group holds 83.36 per cent shares in Mack Star Marketing, whereas HDIL group owns 16.64 per cent.
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However, since Kapoor had very strong relationship with the HDIL group founders Wadhawan’s, fresh loans of ₹202.1 crore were issued to the JV without the knowledge or approval of the other partner (De Shaw Group), it said.
“Of the total loan amount sanctioned, ₹160 crore was used for “refurbishment, modification, renovation of a property in suburban Andheri developed by the JV just two years ago,” the ED said.
Though this property was built at a cost of ₹100 crore, the Wadhawan’s sought an additional ₹160 crore for its renovation. Hence, it is clearly established that Kapoor, in connivance with the Wadhawan’s, had sanctioned the loan, the ED claimed.
The ED also accused Kapoor of making illegal gratification in a property deal in New Delhi’s Amrita Shergill Mark from Gautam Thapar-promoted Avantha Group at a huge discount.
The agency claimed that the property was purchased by a company where Kapoor’s wife is a major shareholder.
Opposing the EDs plea for further remand, Kapoor’s lawyer Satish Manashinde argued that his client has been singled out and that he has not done “anything illegal”.
Naming a few companies such as the Anil Dhirubahi Ambani group, DHFL and Vodafone, Manashinde pointed out that loans taken by these companies also turned NPAs after Kapoor was forced out of the bank. He also said when the loans were sanctioned they were A-rated companies and had loans from other banks too. The court, however remanded Kapoor to further ED custody till March 20.
Meanwhile, Kapoor told the court he has been suffering from asthma and also depression.
Earlier, the ED had said loans worth ₹30,000 crore were given to various entities when Kapoor was on the banks panel and of this ₹20,000 crore have become bad loans.
The Reserve Bank had earlier this month superseded the bank management and put a moratorium it the bank, capping withdrawals at ₹50,000 per account.
The ED has accused Kapoor his family members and others of benefitting worth ₹4,300 crore in alleged kickbacks in lieu of extending large amount of loans to and taking a big illicit fees.
(With inputs from agencies)