Yes Bank founder Rana Kapoor (Image: Reuters)
The Central Bureau of Investigation (CBI) will seek sanction from Yes Bank’s board to prosecute co-founder Rana Kapoor, after a special CBI court in Mumbai rejected the agency’s earlier charge sheet against the banker, which was filed without the bank’s permission.
The CBI court also remitted the case to a lower court for cognisance under sections of the Indian Penal Code (IPC) for cheating and criminal conspiracy. CBI has built its case against Kapoor under provisions of the stringent Prevention of Corruption Act (PCA), 1988 and will approach the lender’s board soon, says a report by The Economic Times.
Moneycontrol could not independently verify the report.
Under the Banking Regulation Act, 1949, Kapoor as Chairman and Managing Director of Yes Bank was regarded as a public servant – and his prosecution has to be sanctioned by a competent authority.
The CBI however was unable to seek sanction as they could not record Kapoor’s statement (mandated by the Supreme Court) due to the COVID-19 pandemic, but failing to file the charge sheet within stipulated time (60 days from date of arrest) would allow Kapoor to apply for bail.
“Hence, the charge sheet was submitted,” a CBI official said as per the report.
Moving forward with the process the CBI last week sought permission from a local Mumbai court to record the statement and is working with officials of Taloja Jail – where Kapoor is lodged to conduct the same.
This statement is expected to be attached to the charge sheet and sent to Yes Bank’s board for approval of prosecution. “Once cleared and communicated to the courts, a request for trail will be made before the special court and not the magistrate court,” the official added.
Notably, some section of PCA are tried before a sessions court, while those with imprisonment of less than seven years are tried before a magistrate court.
The CBI is investigating Kapoor and promoters of Dewan Housing Finance Ltd (DHFL) Kapil and Dheeraj Wadhawan for suspicious transactions in 2018. The investigating agency, which has been probing the case since March this year, named Kapoor, the Wadhawans, RKW Developers Private Limited and Doit Urban Venture India Private Limited (DUVPL) in the charge sheet.
Apart from DHFL and RKW, the probe also examined the alleged roles of Rana Kapoor's daughter Roshni Kapoor and two other firms associated with the Kapoors --- RAB Enterprises (India), and DUVPL - that were named as accused along with Kapoor and four of his family members in a charge sheet filed by the ED recently.
The CBI said initial investigations by its economic offence wing into alleged deals worth Rs 5,050 crore found the Kapoor family received kickbacks in exchange for giving Yes Bank loans to the Wadhawans of DHFL through various channels and in gross violation of rules. Kapoor used his many companies to get undue benefits from the Wadhawans after influencing Yes Bank to extend large loans to DHFL and other Wadhawan companies by flouting rules, according to the CBI.
The agency had on April 26 arrested Kapil and Dheeraj Wadhawan at Mahabaleshwar for their alleged involvement in the illegal transactions.