Mumbai, Dec 15: The Enforcement Directorate (ED) on Monday questioned Yes Bank co-founder and former managing director Rana Kapoor in connection with an alleged money laundering case involving Reliance Anil Ambani Group (ADAG) companies.
Kapoor’s statement was recorded under the Prevention of Money Laundering Act (PMLA). The agency is probing an alleged quid pro quo arrangement between Kapoor and industrialist Anil Ambani, which, according to investigators, resulted in substantial losses to Yes Bank.
Yes Bank Exposure To ADAG Doubled During Kapoor’s Tenure
During Kapoor’s tenure, Yes Bank’s exposure to ADAG companies stood at around Rs 6,000 crore as on March 31, 2017. This exposure allegedly doubled to around Rs 13,000 crore by March 31, 2018, officials said.
ED Probing Investments That Turned NPAs
Rana Kapoor’s questioning is related to the ED probe covering the period between 2017 and 2019, during which Yes Bank invested Rs 2,965 crore in Reliance Home Finance Ltd (RHFL) and Rs 2,045 crore in Reliance Commercial Finance Ltd (RCFL). By December 2019, both investments had reportedly turned into non-performing assets, the ED said.
Estimated Losses Of Over Rs 3,300 Crore
Investigators said the outstanding amounts stood at Rs 1,353.5 crore for RHFL and Rs 1,984 crore for RCFL, leading to estimated losses of approximately Rs 3,300 crore for Yes Bank, amid allegations that funds were diverted by Reliance Group companies.
Alleged Indirect Routing Of Mutual Fund Money
The ED has alleged that RHFL and RCFL received public funds worth more than Rs 11,000 crore. Before Yes Bank invested this money in Reliance Anil Ambani Group companies, the bank had received substantial sums from the erstwhile Reliance Nippon Mutual Fund. SEBI regulations barred direct investments in, or diversion of, funds to Anil Ambani Group finance companies due to conflict-of-interest rules. Consequently, investigators allege, public money from mutual fund schemes was routed indirectly, flowing through Yes Bank’s exposures before reaching the group companies via a circuitous route.
Quid Pro Quo Allegations And Private Meetings
The agency has claimed that the transactions were not standard business dealings but part of a quid pro quo arrangement. In return for Yes Bank’s investments, ADAG companies allegedly extended loans to firms controlled by Rana Kapoor’s family members. Officials added that Kapoor and Anil Ambani held private business meetings to finalise these arrangements, often without other Yes Bank officials, after which Kapoor allegedly instructed bank officers to process non-genuine proposals.
Probe May Widen Further, Multiple Agencies Involved
Officials said Kapoor’s questioning is part of a wider investigation into alleged criminal conspiracy, abuse of official position, and financial misconduct, adding that further questioning may be required as the probe progresses.
Apart from the ED, ADAG companies are also under investigation by the Central Bureau of Investigation (CBI) and the Securities and Exchange Board of India (SEBI).
ED Freezes Rs 77.86 Crore In ADAG Accounts
Recently, the ED placed a lien on and froze Rs 77.86 crore in bank accounts of Anil Ambani-led Reliance Infrastructure, alleging violations of the Foreign Exchange Management Act (FEMA). The action was linked to the Jaipur–Reengus highway project. Including both PMLA and FEMA cases, the total value of assets under scrutiny in connection with the Reliance ADAG Group now stands at Rs 10,117 crore.
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ADAG companies are also under investigation by the Central Bureau of Investigation (CBI) and the Securities and Exchange Board of India (SEBI).
Earlier this month, the CBI booked Jai Anmol Ambani, Anil Ambani’s son, in connection with an alleged cheating of Union Bank of India involving Rs 228.06 crore.
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