Yes Bank's Rana Kapoor, DHFL Promoters Siphoned Off Funds Worth Rs 5,050 Crore: ED

The ED said this in its second supplementary against Rana Kapoor, his family, Wadhawans and others in a money laundering case.

Representational Image (File Photo: Getty)

New Delhi: Yes Bank co-founder Rana Kapoor and Dewan Housing Finance Limited (DHFL) promoters Kapil and Dheeraj Wadhawan siphoned off funds worth Rs 5,050 crore through suspicious transactions, the Enforcement Directorate (ED) alleged.

The ED said this in its second supplementary against Rana Kapoor, his family, Wadhawans and others in a money laundering case.

The ED in its chargesheet filed in a special court in Mumbai recently said it came to light during the probe that a big part of the proceeds of crime (POC) generated in this case has been siphoned off overseas by Rana Kapoor and hence they are not available for attachment directly under the provisions of Prevention of Money Laundering Act (PMLA), PTI reported.

“Rana Kapoor, DHFL promoters Kapil Wadhawan, Dheeraj Wadhawan and others were involved in criminal conspiracy with each other in illegal diversion and siphoning off of funds through suspicious transaction of ₹ 5,050 crore,” the central probe agency claimed in its fresh prosecution complaint filed recently.

Yes Bank, the investigation has revealed, had bought debentures worth Rs 3,700 crore between April 2018 and June 2018 from DHFL, the ED said.

The investigation by the central probe agency also revealed that Yes Bank had used public money for the purchase of the above-said short-term debentures of DHFL, which has not yet been redeemed by DHFL.

The ED said the DHFL, on the other hand, obliged Rana Kapoor by giving the so-called loan of Rs 600 crore to his beneficially-owned company, namely DUVPL, without adequate collateral.

The central probe agency claimed that loans given to the firm owned by Kapoor's family were to camouflage the entire act.

The ED said the probe has revealed that a loan of Rs 600 crore was given against substandard properties having a meager value of Rs 39.68 crore, adding an inflated value of Rs 735 crore was shown by considering further conversion from agriculture land to residential land.

It has also been found that Yes Bank had invested in DHFL just before the sanction of these loans.

This, as per the chargesheet, indicates a criminal conspiracy between Rana Kapoor and Kapil and Dheeraj Wadhawan to get loan by pledging highly overvalued assets.

There was no active or operating business in DUVPL at the time of proposal of loan, the chargesheet added.

Besides, Yes Bank had also sanctioned a loan of Rs 750 crore to one M/s Belief Realtors Private Limited (beneficially owned by Wadhawans) for development of its Bandra Reclamation Project in Mumbai.

The ED said the probe has revealed that the entire amount was siphoned off by the Wadhawans without spending a single penny for the declared purpose.

The entire amount of loan disbursed to M/s Belief Realtors was siphoned off by the Wadhawans, as per the chargesheet, by way of layering through their shell companies and it was never used for the declared purpose.

“There is no doubt about the fact that Rana Kapoor has misused his official position to gain undue financial benefit for him and his family members,” it said.

The ED said the investigation has revealed that the POC generated in this case has been layered in different forms in properties as well as in liquid form, adding it has also been revealed during the investigation that a big part of the POC generated in this case has been siphoned off overseas by Rana Kapoor.

The ED further said the proceeds of crime are thus not available for attachment directly.

Earlier on March 3, 2020, the central probe agency began its investigation into the matter after recording of ECIR.

The chargesheet said Rana Kapoor, after the probe began, aggressively tried to dispose of his overseas properties to save them from being attached by the ED under the PMLA.

Kapoor is currently in judicial custody following his arrest in the case in March 2020.

The DHFL promoters too are in custody after their arrest in another case.

(With agency inputs)