Yes Bank promoter Rana Kapoor being produced at a court, in Mumbai on Monday.(PTI Photo)
Yes Bank promoter Rana Kapoor being produced at a court, in Mumbai on Monday.(PTI Photo)

Yes Bank founder Rana Kapoor’s ED custody extended till March 20; agency probes money laundering charges

Rana Kapoor was arrested by the Enforcement Directorate on March 8 in charges of money laundering.
Hindustan Times, New Delhi | By HT Correspondent
UPDATED ON MAR 16, 2020 05:28 PM IST

Yes Bank founder Rana Kapoor’s custody with the Enforcement Directorate (ED) was extended till March 20 by a special court on Monday. Kapoor was arrested on March 8; he is already under ED custody on the charges of money laundering.

The agency sought Kapoor’s further custody by claiming that loans were given by the bank to a joint venture of real estate company HDIL group, for renovation of a building which was later used to clear dues by HDIL.

The ED told the court that it wants to question Kapoor about various records and documents related to several transactions.

Arguing for the ED, Additional Solicitor General Anil Singh claimed that Kapoor granted loan to a joint venture company namely M/s Mack Star Marketing Pvt Ltd - of which HDIL is part - without any proper documentation. M/s Mack star marketing Pvt Ltd is a joint venture of De Shaw group and promoters of HDIL.

The ED further contended that HDIL had obtained loan from Yes Bank which it was unable to pay. Hence, the agency claimed that HDIL, with the help of Kapoor, obtained loan on the name of one of the joint venture company.

The loan was obtained for repair of the building which was constructed just two years back. “The building was constructed for Rs 100 crore while the loan was for more than the total construction cost,” Singh argued. The ED contended that HDIL had obtained loan of Rs 202.1 crore out of which Rs 140 crore was for the repair of the building located in Andheri.

The agency further argued that the loan was granted even when the majority of shareholders objected and wrote letters to the bank. “The loan was granted for the purpose of repair of the building while it was later used for repayment of dues and loans to prevent the HDIL account from turning NPA,” Singh argued.

Besides, the agency also cited that deal of purchase of property in Lutyens Delhi. The property belonged to Avanta group owned by Gautam Thapa. The agency claimed that the property was purchased by a company where Kapoor’s wife is a major shareholder.

Kapoor’s lawyer Satish Manashinde objected to the contention stating that the Yes Bank founder was being singled out and has not done anything illegal. Manashinde justified all the transactions cited by the prosecution as regular banking practices and claimed there is nothing wrong in all the transactions.

Manashinde also pointed out that the loan accounts turned Non-Performing Assets (NPA) after Kapoor left the bank. He also said that government’s decision to cancel licenses of several telecom companies and coal mining companies also contributed to that.

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