The Enforcement Directorate (ED) arrested Yes Bank founder Rana Kapoor under money laundering charges in the wee hours of Sunday, officials said. They said Rana 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.
Rana Kapoor was questioned by the ED sleuths for over 20 hours after the central agency raided his residence on Friday night. He will be produced before a local court during the day to obtain custody, the officials said.
As per reports, the Enforcement Directorate is investigating the case of alleged kickbacks of Rs 600 crore received by a dummy company controlled by the Yes Bank founder and his two daughters. Media reports suggest that the dummy company Doit Urban Ventures received kickbacks from Dewan Housing Financial Corporation Ltd (DHFL) for loans worth Rs 4,450 crore granted by Yes Bank. The ED suspects that the amount of Rs 4,450 crore was siphoned off by DHFL through 79 dummy companies, including Doit Urban Ventures.
On Thursday, the RBI imposed a moratorium on Yes Bank, superseding its Board of Directors. In the meantime, former Chief Financial Officer of SBI Prashant Kumar has been appointed as its administrator. The withdrawals for customers have been capped at Rs.50,000. However, an exception can be made on the grounds of a medical emergency, higher education costs, marriage expenses, and unavoidable emergency.
The RBI has cited Yes Bank's “inability to raise capital to address potential loan losses” and “serious governance issues” as some of the reasons for taking action. The RBI on Friday unveiled a draft reconstruction scheme of Yes Bank in the public domain. Moreover, the RBI has invited suggestions and comments from the members of the public until March 9, 2020.
Under the ‘Yes Bank Ltd. Reconstruction Scheme, 2020’, the authorised capital of the reconstructed bank shall be altered to Rs.5,000 crore while the number of equity shares will be 2,400 crores. The investor bank shall hold 49% shareholding in the reconstructed bank. Moreover, it cannot reduce its holding below 26% before the completion of three years of infusion of the capital.
Once the scheme comes into operation, the RBI-appointed administrator will be replaced by a new Board on which the investor bank will have two nominee directors. Importantly, the draft states that no customer will be entitled to get any compensation from the reconstructed bank on account of the changes occurred by virtue of the scheme. On the other hand, all employees will continue in service with the same terms and services at least for a period of one year.
Addressing a press conference on Saturday, State Bank of India Chairman Rajnish Kumar revealed that the SBI wants to pick a 49% stake in Yes Bank. Mentioning that the draft reconstruction plan had been unveiled by the RBI, he said that SBI's investment and legal team of SBI is conducting due diligence on it. Thereafter, Kumar stated that the SBI would get back to the RBI with its comments before the March 9 deadline.
Kumar explained the obligations that are a part of the draft scheme. He declared that the SBI would make an initial investment of Rs.2,450 crore in Yes Bank. In response to a specific question asked by Republic TV regarding the ED raids on Yes Bank founder Rana Kapoor, the SBI Chairman replied that an individual was different from an entity. He refuted the notion that the raids would have an impact on SBI’s investment in Yes Bank.
(With agency inputs)