The Enforcement Directorate (ED) on Thursday launched raids at 35 locations in connection with a loan fraud probe against Anil Ambani-led Reliance Anil Dhirubhai Group companies, people familiar with the development said. Yes Bank officials, including former chairman Rana Kapoor, are also under the scanner, they added.
Officials said over 35 premises of 50 companies and over 25 individuals were being raided under the Prevention of Money Laundering Act.
The financial crimes probe agency has taken over two cases registered by the Central Bureau of Investigation (CBI) on September 19, 2022, related to two separate loans given by Yes Bank to Reliance Home Finance Limited (RHFL) and Reliance Commercial Finance Ltd (RCFL). In both cases, CBI had named Rana Kapoor.
Subsequently, an official cited above said, other agencies and institutions such as the National Housing Bank, SEBI, National Financial Reporting Authority (NFRA), and Bank of Baroda also shared information with the ED.
“Preliminary investigations have revealed a well-planned and thought-after scheme to divert or siphon off public money by cheating banks, shareholders, investors, and other public institutions,” said the officer. He added that “the offence of bribing bank officials, including founder of Yes Bank [Rana Kapoor] is also under scanner."
A second official said preliminary investigations have revealed “illegal loan diversion of around ₹3000 crores from Yes Bank between 2017 and 2019.”
{{/usCountry}}A second official said preliminary investigations have revealed “illegal loan diversion of around ₹3000 crores from Yes Bank between 2017 and 2019.”
{{/usCountry}}“We have also found that just before the loan was granted, the Yes Bank promoters [Kapoor] received money in their concerns. The ED is investigating this nexus of bribe and the loan,” said the second officer.
The ED has found “gross violation” in Yes Bank loan approvals to Reliance Anil Ambani Group Companies. “Credit approval memorandums (CAMs) were back-dated, investments were proposed without any due diligence or credit analysis in violation of the bank’s credit policy,” a third officer said.
Further, “in violation of the loan terms, these loans were diverted to many group companies and shell companies”.
Some red flags found by ED during probe include “loans given to entities with weak financials, no proper documentation, no due diligence, borrowers having common addresses, common directors, etc, and diversion of loans to promoter group entities, evergreening of loans, loans disbursed on same date as date of application, loans disbursed prior to sanction, misrepresentation of financials”, he said.
Reliance Infrastructure and Reliance Power released a separate statement, saying, “The media reports appear to pertain to allegations concerning transactions of Reliance Communications Limited (RCOM) or Reliance Home Finance Limited (RHFL) which are over 10 years old. RCOM is undergoing Corporate Insolvency Resolution Process as per the Insolvency and Bankruptcy Code, 2016 since over 6 years. RHFL has been fully resolved pursuant to the judgment of the Hon’ble Supreme Court of India. Similar allegations as those set out in the media reports are sub-judice and pending before the Hon’ble Securities Appellate Tribunal, as per publicly available information,” it added.
SEBI, the market regulator, has also shared its findings with ED in the case of RHFL.
The third officer said there was a dramatic increase in corporate loans by RHFL, from ₹3,742.60 crore in FY 2017-18 to ₹8,670.80 crore in FY 2018-19, which is also under ED lens.