Yes Bank founder Rana Kapoor arrested for money laundering

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Mumbai, March 08, 2020: The Enforcement Directorate (ED) arrested Yes Bank founder Rana Kapoor on late Saturday night under money laundering charges in Mumbai, news agency PTI reported. Kapoor was questioned on Saturday by the agency, which conducted searches at premises associated with the Yes Bank promoter.

Kapoor was placed under arrest around 3 am under the provision of the Prevention of Money Laundering Act (PMLA) as he was allegedly not cooperating in the probe, PTI reported quoting officials. They added that he will be produced before a local court during the day to obtain custody.

Kapoor was questioned over a Rs 600-crore loan from a non-banking financial company (NBFC), which is an associate company of Dewan Housing Finance Limited (DHFL), to DoIT Urban Ventures (India) Private Ltd, a company owned by Kapoor’s family, at a time when Yes Bank had loan exposure of over Rs 3,000 crore to DHFL. Rana Kapoor was the MD and CEO of Yes Bank till January 2019.

Documents available with the Registrar of Companies under the Ministry of Corporate Affairs show that DoIT was incorporated in 2012 with Rana Kapoor’s wife Bindu as its director.

It currently has his daughters Roshini Kapoor and Radha Kapoor Khanna as its directors.

The company has no employees and in the year ended March 2019, it incurred a loss of over Rs 48 crore on a revenue of Rs 59.36 crore. Morgan Credits Private Ltd is also one of the promoters of DoIT Urban and its directors are Kapoor’s daughters Roshini Kapoor, Raakhe Kapoor Tandon and Radha Kapoor Khanna.

The ED action came after the Reserve Bank of India (RBI) on Thursday imposed a moratorium on the capital-starved Yes Bank, capping withdrawals at Rs 50,000 per account, and superseded the board of the private sector lender with immediate effect. Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.

As per the RBI’s draft reconstruction scheme, State Bank of India will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan.