Yes Bank fraud: CBI court allows ED to take Pune builder Avinash Bhosale into custody

The Enforcement Directorate (ED) has got permission from a court to take Pune-based builder Avinash Bhosale into custody from Arthur Road jail

The Enforcement Directorate (ED) has got permission from a court to take Pune-based builder Avinash Bhosale into custody from Arthur Road jail. The agency is probing the money-laundering aspects of a fraud at Yes Bank which involved Dewan Housing Finance Corporation Limited (DHFL) promoters Kapil and Dheeraj Wadhawan.

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Bhosale, the promoter of Avinash Bhosale Infrastructure Limited (ABIL) and the father-in-law of Maharashtra minister and Congress leader Vishwajeet Kadam, was arrested in the bank fraud case by the Central Bureau of Investigation (CBI) on May 26.

Special prosecutor Sunil Gonsalves, appearing for the ED, on Monday presented before special CBI judge S U Wadgaonkar a production warrant obtained from the special PMLA (Prevention of Money Laundering Act, 2002) court. The court then directed the superintendent of Arthur Road jail to hand over Bhosale’s custody to ED officials.

According to the CBI, between April and June 2018, Yes Bank had invested ₹3,983 crore in short-term non-convertible debentures or “masala bonds” of DHFL. The bank subsequently also sanctioned a term loan of ₹750 crore to a DHFL group firm and in return, the then Yes Bank managing director and chief executive officer, Rana Kapoor, received a kickback of ₹600 crore from DHFL in the form of a loan to his family firm, Do It Urban Ventures (India) Private Limited.

In its application of May 27, seeking Bhosale’s remand, the CBI had said that in further investigation it found that in 2017 and 2018, DHFL had paid ₹68.82 crore to the Bhosale group firms under the guise of providing consultancy services like architectural, construction planning, and financial advice for three construction projects of builder Sanjay Chhabariaa, also arrested in the case, and one project of builder Sudhakar Shetty.

“But no such services were provided and the entire payment was obtained by companies of Bhosale without performance of any work/service,” the application said, adding that Chhabariaa’s Radius Group had also diverted ₹292.50 crore after receiving loans of ₹2,000 crore from DHFL. “M/s Sumer Radius Realty diverted the said amount to M/s Nibodh Realty LLP and ABIL Dairy, companies of Bhosale,” it said.