Yes Bank Scam: Over 100 firms that ‘diverted’ money, Rs 87-crore gift to wife under ED lens

The Enforcement Directorate (ED) is poring over the books of more than 100 companies owned/controlled/managed by the founder of the troubled Yes Bank, Rana Kapoor, and his family members.

The ED is conducting a money-laundering investigation into allegedly dubious transactions between the now bankrupt Dewan Housing Finance Corporation Limited (DHFL)’s group firms and Yes Bank in 2018. It has pegged the proceeds of crime—the money suspected to have been laundered—at Rs 5,050 crore, and suspects that several companies associated with the Kapoor family were used to divert and park these funds.

“The investigation conducted so far has further revealed that more than 100 companies were owned by the family of Rana Kapoor and he is the person who has been controlling/managing the affairs of these firms,” ED told a special PMLA court that is hearing the Yes Bank case. “Details of several companies beneficially owned by Rana Kapoor and his family members have come to [our] notice, which have been used for diverting the proceeds of crime as well as layering, siphoning and parking of funds,” the ED told the court.

It gave a list of the 100-odd firms, whose activities mostly pertain to ecotourism, real estate and fashion. Among them are RAB Enterprises (India) Private Limited, Morgan Credits Private Ltd and DOIT Urban Ventures (India) Pvt Ltd, which were recently named as accused along with Kapoor and four of his family members in the ED’s chargesheet submitted in court.

The ED is looking at three transactions between Kapoor and DHFL’s firms for alleged anomalies: the bank’s subscription of DHFL’s short-term debentures worth Rs 3,700 crore in April-June 2018, when Kapoor was the bank’s MD and CEO; DHFL’s simultaneous sanctioning of a Rs 600-crore loan to DOIT Urban Ventures Limited; and the bank’s grant of a Rs 750-crore loan to a company allegedly controlled by DHFL group for a Bandra Reclamation redevelopment project.

According to the ED, Kapoor pumped Rs 87 crore into RAB Enterprises, which is owned by his wife Bindu. In its chargesheet, it said Bindu is a homemaker without any other substantial source of funds. “She has received this fund as a rupee gift from her husband,” the ED said. According to the ED, RAB Enterprises has 15 fully-owned subsidiaries and received funds worth “Rs 745 crore by various inter-corporate deposits from its 100% owned subsidiaries”. Kapoor, when asked about his Rs 87-crore gift to his wife, told the ED that the money had come from “tax-free dividend income” from his personal shares in Yes Bank.

The ED has also accused Kapoor of accepting kickbacks from DHFL for investing in its debentures via the companies held by his wife and three daughters. The chargesheet said it is suspected that Kapoor “misused his official position in several other transactions and obtained kickbacks directly or indirectly through entities controlled by him or his family members”.

Kapoor was arrested by the ED on March 8, three days after the RBI imposed a moratorium on the capital- starved Yes Bank and capped withdrawals at Rs 50,000 per account. The moratorium was lifted 10 days later.

The CBI is conducting its own investigation into suspicious transactions between Kapoor and the DHFL. The DHFL is already under the ED’s lens over the sale of three Worli assets of late narcotics trafficker Iqbal Mirchi to a company it allegedly controlled. The ED’s probe has revealed that over Rs 12,000 crore was siphoned off from DHFL.