ED arrests Kapil and Dheeraj Wadhawan in Yes Bank money laundering case

Dewan Housing Finance Limited (DHFL) promoters, Kapil and his brother Dheeraj Wadhawan, were arrested on Thursday in connection with a money laundering case of Yes Bank being probed by the Enforcement Directorate (ED).

The duo was produced before a special Prevention of Money Laundering Act (PMLA) court, which remanded them to ED’s custody till May 24.

A single-judge bench Bombay high court (HC), comprising Justice Bharati Dangre, on Tuesday had rejected the Wadhawans’ anticipatory bail plea and said that custodial interrogation was needed because of the serious nature of allegations such as money laundering and the accused had entered into a conspiracy with several others, including Yes Bank promoter Rana Kapoor and his family members.

The judge said that only the applicants can shed light on the nature of the transactions and the alleged conspiracy could be cracked after their interrogation.

ED had initiated proceedings against the Wadhawans based on a first information report (FIR) registered by the Central Bureau of Investigation (CBI) on March 7 against Kapoor for conspiracy, cheating and under relevant provisions of the Prevention of Corruption Act.

It is alleged that between April and June 2018, Yes Bank invested Rs 3,700 crore in short-term, non-convertible debentures of DHFL and Kapoor received Rs 600 crore as kickbacks from DHFL, in the form of loan advanced to two firms, DOIT Urban Ventures (India) Private Limited and Morgan Credits Private Limited.

While Kapoor’s daughters hold 100℅ stakes in DOIT, Morgan Credits is controlled by his wife.

ED also alleged that the Wadhawans had formed at least 79 companies to siphon off money.

Additional solicitor general Anil Singh, appearing on behalf of ED, opposed the pleas and stated that the debentures were not yet redeemed by DHFL and Yes Bank had not received its amount back.

He added that DHFL has extended a loan of Rs 600 crore to the firms controlled by Kapoor’s family by showing grossly overvalued properties.

ED officials said that it had served the summons to the Wadhawans to cooperate with them and to appear before the last week of March, but they did not cooperate. The agency also said that the claims of lockdown restrictions do not hold because if they could travel to Mahabaleshwar, they could have visited the ED office as well.

The Wadhawans, along with a group of 23 people, had flouted the prevailing lockdown restrictions and travelled to Mahabaleshwar from Khandala on April 8. The family had managed to leave Mumbai on the permission letter issued by senior state government officials, which is under investigation.