The alleged crimes committed by Rana Kapoor, by criminal abuse of the funds of Yes Bank, which inherently are public deposits, are now in news in full flow.

Yesterday was a day of custody, court and arrest for the former CEO/promoter of Yes Bank, which is now under a 30 days moratorium by the RBI, and where due to his crimes, public deposits of over Rs.2 lakh crores have been at risk. The holiday sessions judge granted the ED custody of Rana Kapoor, till 11th March, refusing to accept his plea that he is innocent, that he is being made a scapegoat, that it is a case of selective targeting and that the alleged various funding transactions of Yes Bank with DHFL were completely kosher and legal, in as much as that it was an AAA-rated entity when Yes Bank invested Rs.4450 crores into debentures of DHFL and that it was not the only one to do so since 35 others institutions had lent thousands of crores to DHFL in a similar manner. He claimed that due process of law was followed by Yes Bank and that the transactions are not illegal by any measure.

About the reciprocal loans of Rs.600 crores given by way of quid pro quo by DHFL to DoIT Urban Ventures, which are companies owned by his daughters, he said that it was a genuine and bonafide transaction with an underlying security of Rs.735 crores and was supported by his daughter’s personal guarantee with a net worth of Rs.2000 crores. He said that interest of Rs.130 crores has been paid by the DoIT companies to DHFL till date, there is no default there and that the loan is repayable only by March 2023. Thus the said loan does not represent bribes/kickbacks as alleged. His plea that he is unwell is undergoing psychiatric treatment and that he is cooperating fully with the ED, cut little ice with the judge, who ordered his arrest. His daughters too were raided by the ED, a statement was recorded and one of them was prevented from taking a flight to London, on the basis of a lookout circular issued by the Income Tax Department and the investigating agencies.

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Apart from the ED, the CBI too has now registered a criminal case against Rana Kapoor and is likely to seek his arrest, immediately upon his release by the ED, whenever it be so. We have witnessed such alternate arrests by the ED and the CBI take place in the case of former FM Shri P. Chidambaram. The ITD is also anyway investigating the massive tax evasion and benami holdings/assets of Rana Kapoor and family. So now for the same criminal illegal transactions of Yes Bank-DHFL-Rana Kapoor, we see multiple agencies, multiple investigations and perhaps multiple punishments too. Let us examine the reasons for that.

  1. The ED is pursuing investigation and prosecution against Rana Kapoor, under the PMLA and FEMA laws. Its charge is that by giving dud loans of Rs.4450 crores to DHFL by way of debentures and thereafter upon their non-payment by DHFL, receiving loans of Rs.600 crores from DHFL into his daughter’s companies viz. DoIT Urban Ventures, he has fraudulently siphoned away from public money and has indulged in the crime of corruption too. These are crimes which are punishable under the PMLA with heavy penalty and jail sentence too. It alleges that it was against these dud loans given to DHFL that it gave loans of Rs.600 crores to his daughter’s company, as a quid pro quo, a mirror image of what Chanda Kochhar, did in ICICI Bank and its loans to the Videocon Group. The ED also alleges that Rana Kapoor received kickbacks of Rs.4300 crores for various loans sanctioned by Yes Bank, which have been laundered through 12 shell entities. The ED is also investigating the sources of funds through which Rana Kapoor has purchased a couple of properties in the UK.
  2. The charge of the CBI against Rana Kapoor is that of indulging in corruption and defrauding the bank in his capacity as CEO. It is a case of criminal conspiracy and corruption according to the CBI, with links/transacting with the underworld, hand in glove with Kapil Wadhwan of DHFL.
  3. The Income Tax Department is investigating tax evasion in respect of these criminal receipts running into 000’s of crores, by his daughter’s company and also by those shell entities and unexplained investments of over Rs. 2000 crores and items like 44 expensive paintings. It is also investigating charges of Benami ownership of companies/assets, which in reality belong to Rana Kapoor.

His career as a banker is over and his reputation is tarnished forever. The charges are unproven, but with the kind of incriminating evidence against him, his retirement seems to be doomed in courts, custody and battling charges for serious crimes committed by him.

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