ED to file chargesheet against Rana Kapoor, 7 others; provisionally attach Rajiv Gandhi painting: Sources

The Enforcement Directorate (ED) may file its first chargesheet on May 6 against Rana Kapoor, Bindu Kapoor, Rakhee Kapoor, Roshni, Radha Kapoor, Morgan Credits, RAB Enterprises (India) private limited and Yes Capital India Private Limited.

ED has provisionally attached 168 bank accounts of Rana Kapoor, family members and associates companies worth Rs 52 crores.

Also, It has provisionally attached mutual funds worth of Rs 3 crores and 59 paintings worth of Rs 4 crores that includes an MF Hussain painting of Rajiv Gandhi. The painting was sold by Priyanka Gandhi Vadra to Kapoor in 2010 for Rs 2 crore.

A source told Moneycontrol, “In the first chargesheet, proceeds of crime could be around Rs 5,050 crores which may increase in further chargesheets”

As per a document reviewed by Moneycontrol, out of Rs 5,050 crore, an amount of Rs 600 crore has been received by Kapoor and his family members or family-owned entities directly. The same appears to have been further utilised either in the business or in procuring more properties.

ED recorded the statement of Ravneet Gill, the former managing director of Yes Bank, who mentioned the wrongdoings in the company. Gill mentioned in his statement, “I analysed the asset portfolio of the bank and found that the bank had assumed very large exposures (relative to its net worth) to many entities which were facing significant stress and illiquidity.”

Over a period of time, many such accounts emerged where NPAs had been averted through accounting practices or due to inability to repay loans; that the notable cases where large NPAs arose included (ADAG Group, (b) DHFL, (c ) Essel Group, (d) Cox & Kings, (e) Radius Developer, (f) Sahana Developers, (g) Omkar Group, (h) Avantha Group, (i) Sumer Group and (k) SKIL.

He also stated that Yes Bank had sanctioned a loan of Rs. 750 crore to Belief Realtor Pvt. Ltd. He also stated that the loan to Belief Realtor - a company of the DHFL Group controlled by Dheeraj Wadhawan and Kapil Wadhawan; had been sanctioned on date June 18, 2018 by the Management Credit Committee (MCC) headed by Rana Kapoor, MD & CEO of Yes bank.

Gill also mentioned the following:

The loan was disbursed on September 27, 2018. Prior to that, in August, 2018, the MCC approved an additional loan of Rs 950 crore to Belief Realtors. Since the loan amount of Rs 1,700 crore required a Board Credit Committee (BCC) approval, this item was required to be placed in the BCC, scheduled for August 28, 2018. But, this item was not discussed in the meeting. On August 29, 2018, a separate loan of Rs 950 crore was sanctioned by the MCC to RKW Developers Pvt Limited. The loan was shifted to RKW Developers instead of increasing the loan amount to Belief Realtor as Rs 950 crore fell within the powers of the MCC. While the documentation for the loan to RKW Developers was underway, the Reserve Bank of India (RBI) started a special audit and, on the basis of that, the sanction to RKW was cancelled.

As per Rana Kapoor’s statement given to ED, DHFL - in 2018 -
issued retail senior public debentures worth Rs 8,000-10,000 crore, and approximately Rs 3,000 crore was allocated for purchase by Yes bank Ltd. as per the BCC approval. He also stated that a loan of Rs 1,200 crore had been given by Yes Bank to Aadhar Housing Finance, a DHFL group company.

A loan of Rs. 600 crore against property was sanctioned by DHFL to Doit Urban Ventures India LId. (DOIT) - wholly owned by a company namely M/s Morgan Credits Pvt. Ltd. (MCPL). Morgan Credits,in turn, is equally held by Kapoor's three daughters (33% each) namely Radha K. Khanna, Rakhee K. Kapoor and Roshni Kapoor.

Kapoor further stated that two earlier loans of Rs 300 crore each had been given to DOIT by DHFL, which were duly closed in August 2018. A renewed loan of Rs 600 crore was granted. Against the loan, DOIT mortgaged five properties though Kapoor was not sure if the valuation of these properties was carried out at the time of its mortgage.

Kapil Wadhawan and Dheeraj Wadhawan put up a proposal for the sanction of a loan of about Rs 1,700 crore from Yes Bank in the name of Belief Realtors PVT Limited (BRPL) for Bandra Reclamation Project situated near Lilavati Hospital.

Dheeraj wanted to pay DHFL standing in the name of RIP Developer. By that time, the company for which the loan had to be applied was not decided. At that time, for the Bandra Reclamation project, there was a deed of assignment between RIP Developer and Wizard Constructions (India) Pvt Limited. RIP Developer was owned by Gopal Dalvi, a very close friend of Dheeraj Wadhawan.

On this Bandra Reclamation Project, they took a loan of Rs 725 crore from DHFL which was invested by Wadhawans for purchasing the preference shares of Kyta Advisors Pvt Limited. It was never used for the declared end use. Yes bank never intended to give the loan to RIP Developers as it was not declared as their group company.

Therefore, Kapil Wadhawan and Dheeraj Wadhawan decided to obtain the loan in the name of BRPL as it was beneficially owned by the Kapil
Wadhawan & Dheeraj Wadhawan group.

Yes Bank bifurcated the loan into two parts as they were getting some problem in sanctioning the loan in one entity. Accordingly, Rs 750 crore was sanctioned in the name of BRPL and Rs 950 crore in the name of RKW project.

However, the loan to RKW project Management private limited could not be disbursed as it was cancelled by Yes Bank. The loan of Rs 750 crore, after disbursement, was ultimately transferred to DHFL after several layering.

As per Moneycontrol’s source, “The loan risk team of Yes Bank pointed out multiple and serious issues in the proposal, such as the majority of the project approvals not being in place, slum evacuation not having started and the conduct of the account not being satisfactory with other lenders etc.”

“The Letter of Intent (Lol) issued by SRA was for carpet area of 1.3 Lac sq ft whereas the proposal from BRPL had considered an area of 6.3 Lac sq. ft. Standard Process stipulated by the bank for valuation was waived and no end use certificate was called for from the borrower. No end-use monitoring was done by the bank required by the RBI guidelines. However, the loan was sanctioned,” the source said.

“This indicates that this was done deliberately to siphon off the money from Yes Bank. The criminal conspiracy between Rana Kapoor and the Wadhawans became apparently clear with the fact that Rs.750 crore was sanctioned to M/s Belief Realtors Group’s company of RKW Developers group - beneficially owned by Wadhawans. The same amount was rotated through various entities of RKW group transferred to DHFL without a penny being spent,” the source added.