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71 loans given in Rana Kapoor’s tenure turned bad: ED
The charge sheet by the central agency that investigates financial crimes was filed on October 1 in a Delhi court in connection with irregularities in a loan worth ₹514.27 crore granted to the Avantha Group by Yes Bank in 2018. HT has reviewed a copy.
At least 71 loans worth over ₹31,855 crore approved by Yes Bank during the tenure of former chief executive and managing director Rana Kapoor have turned bad, according to a recent charge sheet by the Enforcement Directorate.
The charge sheet by the central agency that investigates financial crimes was filed on October 1 in a Delhi court in connection with irregularities in a loan worth ₹514.27 crore granted to the Avantha Group by Yes Bank in 2018. HT has reviewed a copy.
The directorate has accused Kapoor and Gautam Thapar, promoter of the Avantha Group, of colluding to fraudulently obtain a credit facility by creating sham agreements, causing a loss of public money worth ₹466.51 crore. Out of ₹514.27 crore, ₹14.11 crore was in processing fees, which was paid by Oyster Buildwell Pvt. Ltd, an Avantha Group company. And of the total, only ₹47.75 crore was recovered by the bank.
Several officers of Yes Bank were paid huge salaries, much higher than market rates, and were given perks, promotions and prestigious titles by Kapoor to deter them from raising red flags in the dubious decisions, the charge sheet said.
When these officers were interrogated, they held Kapoor responsible, but the agency alleged that they were hand-in-glove with him in taking these decisions.
The new management of Yes Bank found Ashish Agarwal, senior group president and chief risk officer, accountable for 71 bad loans worth ₹31,855 crore, and imposed a penalty of ₹50 lakh on him for dereliction of duty, ED said in the charge sheet.
“It is important to mention here that all these (71) loans had been sanctioned under the chairmanship of Rana Kapoor, including the one given to Avantha Group,” according to the charge sheet.
In most of these 71 loans, investigations are either ongoing or the loans have been declared as fraud.
Agarwal was paid a salary of ₹5 crore every year during Kapoor’s tenure. The new management has reduced it to ₹2 crore.
Other Yes Bank executives, including Amit Kumar (president), Harsh Gupta (former president), Vinod Bahety (group president), Amit Mamtani (president), Pawan Kumar Aggarwal (senior president) and others, who were paid high salaries by Kapoor-led management, have faced financial penalties or salary reduction after the irregularities were revealed.
ED has named them as accused in the charge sheet.
Avantha Group’s Thapar and Kapoor are also being investigated in other cases, including a probe pertaining to sale of a 1.2-acre bungalow at 40, Amrita Sher-Gil Marg in New Delhi, allegedly at half its market price, in lieu of a loan worth around ₹1,900 crore granted by Yes Bank to Thapar’s group company. It is alleged that a bribe of ₹307 crore changed hands during the sale of the bungalow.
Kapoor is lodged in a Mumbai jail. Gautam Thapar was arrested in August this year and is lodged in a jail in Delhi.
Yes Bank did not respond to detailed queries. Kapoor’s team was not available for comment while Thapar’s legal team didn’t respond to HT’s calls.
