Mumbai, June 18: The Enforcement Directorate (ED) has seized cash of Rs 50 lakh and around 10 kg of silver bars during search operations conducted at 17 locations in Mumbai and Delhi on Tuesday in connection with a money laundering probe linked to Housing Development & Infrastructure Ltd (HDIL) and other entities, officials said on Thursday.
The searches, conducted under the provisions of the Prevention of Money Laundering Act (PMLA), also led to the recovery of bank lockers and several incriminating documents from premises linked to Suraksha Asset Reconstruction Company Ltd (SARCL), Suraksha Realty Ltd, Khyati Realtors Pvt Ltd and associated individuals, the agency said.
The central agency's action stems from an initial First Information Report (FIR) registered by the Central Bureau of Investigation's Anti-Corruption Branch (CBI, ACB) against HDIL and its promoters for the alleged illegal procurement and diversion of loans amounting to around Rs 200 crore.
Probe traces alleged loan diversion
The ED's money laundering investigation has unravelled a deep-rooted conspiracy dating back to the period between 2011 and 2016. According to the agency, HDIL promoters Rakesh Kumar Wadhawan and Sarang Wadhawan conspired with Rana Kapoor, the former Managing Director and CEO of Yes Bank, to fraudulently secure six distinct term loans totalling approximately Rs 200.30 crore.
Investigators claim the credit facilities were sanctioned in the name of Mack Star Marketing Pvt Ltd (MSMPL) between 2011 and 2016. However, instead of being used for legitimate business purposes, the entire loan amount was allegedly siphoned off and diverted to clear liabilities of various HDIL group companies. Properties belonging to MSMPL were also allegedly alienated and transferred to close associates of the accused, according to the probe.
Allegations of evergreening stressed loans
The investigation took a significant turn as investigators uncovered how the toxic debt was systematically masked. The ED alleges that Kapoor not only facilitated the initial diversion of the loan proceeds to favour HDIL but later engineered a premature assignment of the stressed MSMPL loan account to Suraksha ARC, a move allegedly aimed at “evergreening” Yes Bank’s bad loans and keeping them off regulatory scrutiny.
During 2017-18, Suraksha ARC is said to have acquired a significant portion of Yes Bank’s stressed asset portfolio, including the MSMPL account. However, investigators have flagged suspected financial round-tripping during this period.
According to the ED, Yes Bank simultaneously extended massive fresh credit facilities to various entities under the 'Valia Group'. These funds are suspected to have been routed back, directly or indirectly, to meet the mandatory cash margin requirements that Suraksha ARC needed to acquire those very same stressed loan portfolios from Yes Bank.
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Forensic review reveals circular transactions
Forensic examination of financial records has reportedly revealed a series of circular transactions among group entities, allegedly disguised as legitimate cash margin payments by the ARC. Investigators believe these transactions created a complex liquidity loop that enabled the acquisition of stressed assets while masking underlying fund flows, the agency said.
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