Yes Bank distances itself from investment firms owned by promoter Rana Kapoor

Yes Bank has clarified it has no business dealings with the two Rana Kapoor-promoted investment firms that have come under regulatory and investor lens.

“The bank is not involved in any way whatsoever with the funds management of two companies referred in media articles and the bank has no dealings with these two companies except to the extent that Yes Capital (India) Private Limited (YCPL) and Morgan Credits Private Limited (MCPL), being promoter group entities,” Yes Bank said in a statement.

Morgan Credits and Yes Capital are holding companies owned 100 percent by Radha K Khanna, Raakhe Tandon and Roshini Kapoor -- the three daughters of Rana Kapoor.

The three woman entrepreneurs have a team working under the brand “The Three Sisters: Institutional Office (TTS.IO)” through which greenfield, start-up ventures have been established. Each start-up business is run by a professional CEO and management team.

A report by the Economic Times on November 28 pointed out Yes Bank’s co-founder Rana Kapoor's investment companies may come under the regulator's lens for reportedly using borrowed money from mutual funds as equity in a finance company through a questionable transaction.

Yes Capital is said to have borrowed funds from the market, a part of which was invested in ART Capital, which subsequently invested a portion of that in ART Housing Finance through subsidiaries.

Yes Capital’s balance sheet shows the investment of debt as equity in ART Capital. The ultimate beneficial ownership of both companies rests with Yes Capital, which also owns shares in Yes Bank.

"TTS:IO, MCPL, YCPL or the start-up ventures have no involvement and/or commercial dealings with Yes Bank (except that MCPL and YCPL are amongst the promoter shareholders of Yes Bank holding 3.04 percent and 3.27 percent shares of the bank, respectively), and both institutions run completely independently," the investment firms said in a note clarifying on the matter.

"Rana Kapoor is also not involved in any capacity including as a shareholder, director or management of MCPL, YCPL, TTS:IO, or the start-up ventures," the note pointed out.

As per the note, MCPL and YCPL have raised some debt to address their growth objectives but it is well within their eligibility limits.

"MCPL and YCPL have at all times complied with all covenants of such debt including servicing obligations and will continue to do so," the investment firm said in the note.