The ED said so in its second supplemental indictment filed in a money laundering case in a special court in Mumbai against Rana Kapoor, his family, Wadhawane and others
The ED said so in its second supplemental indictment filed in a money laundering case in a special court in Mumbai against Rana Kapoor, his family, Wadhawane and others
The Enforcement Directorate (ED) has alleged that Yes Bank co-founder Rana Kapoor and Dewan Housing Finance Limited (DHFL) promoters Kapil and Dheeraj Wadhawan siphoned ₹5,050 crore worth of funds through suspicious transactions.
The ED said so in its second supplementary (third overall) indictment recently filed in the Mumbai Special Court against Rana Kapoor, his family, Wadhawane and others in a money laundering case.
During the investigation, it emerged that a large portion of the proceeds of crime (POC) generated in this case by Rana Kapoor were siphoned abroad and are therefore not directly available for seizure under the provisions of the Money Laundering Act (PMLA), it said.
“Rana Kapoor, DHFL promoters Kapil Wadhawan, Dheeraj Wadhawan and others were involved in a criminal conspiracy to illegally divert and siphon off funds from suspicious transactions totaling 5,050 crore,” the Central Bureau of Investigation claimed in its new law enforcement complaint ( indictment sheet) recently filed.
The ED said the investigation found that Yes Bank bought ₹3,700 crore of debt securities from DHFL between April 2018 and June 2018. Therefore, the amount was transferred to the DHFL. Subsequently, DHFL made a loan of ₹600 crore to DOIT Urban Ventures Pvt Ltd (a company beneficially owned by Rana Kapoor and his family).
The investigation also found that Yes Bank had used public funds to purchase DHFL’s aforementioned short-term debt securities, which had not yet been repaid by DHFL.
On the other hand, the DHFL committed Rana Kapoor by providing the so-called 600-crore loan to his beneficiary company, namely DUVPL, without adequate collateral, the agency said.
It has been alleged that the loans provided to the company by Kapoor’s family were used to camouflage the entire crime.
The inquiry has found a £600m loan against substandard property valued at a measly £39.68m at £39.68m and allowing for further conversion of farmland to residential land at an inflated value of £735m , added her.
It has also come to light that Yes Bank had invested in the DHFL just prior to the approval of these loans. This points to a criminal conspiracy between Rana Kapoor and Kapil and Dheeraj Wadhawan to obtain a loan by pledging grossly overvalued assets, the indictment said, adding that there was no active or operational business in DUVPL at the time the loan was offered .
As DUVPL is not in business and as such has no income as of today, given its current operations and income, it may not be able to repay the loan. This clearly points to a case of consideration, it said.
In addition, Yes Bank had also approved a £7.50 billion loan to M/s Belief Realtors Private Limited (beneficially owned by Wadhawans) for the development of their Bandra reclamation project in Mumbai. Investigations revealed that the entire amount was siphoned off by the Wadhawans without spending a single penny on the stated purpose, the ED added.
The entire loan amount disbursed to M/s Belief Realtors was siphoned off by the Wadhawans by breaking through their shell companies and was never used for its stated purpose, the indictment says.
“There is no doubt that Rana Kapoor abused his official position to provide him and his family members with improper financial benefits,” it said.
The investigation revealed that the POC produced in this case was stratified in various forms in properties as well as in liquid form. During the investigation, it was also found that a large part of the POC generated in this case was diverted abroad by Rana Kapoor. The proceeds of crime are therefore not directly available for attachment, the ED said.
The ED had begun its investigation according to ECIR’s recording on March 3, 2020 and once the investigation had begun, Rana Kapoor aggressively attempted to dispose of his overseas properties to protect them from being attached by the ED under PMLA, it says in the indictment.
The POC involved in this case is ₹5,050 crore. While Rana Kapoor is the founder of the said company called DUVPL, his three daughters are 100 percent shareholders.
Rana Kapoor is currently in custody following his arrest in the case in March 2020. Wadhwans are also being held in another case following their arrest.
