ED arrests former Yes Bank MD & CEO Rana Kapoor in money laundering case

The central agency conducted searches at Kapoor's Mumbai residence Samudra Mahal late on the evening of March 6. He was then called in for questioning at the ED's zonal office in Mumbai. The Joint Director left the venue at around 4. 15 am after completing Kapoor’s questioning.

Kapoor is being investigated in the alleged irregularities in the investment of over Rs 4,300 crore Employees’ Provident Fund (EPF) of Uttar Pradesh Power Corporation (UPPCL), the state-owned power firm, in the scam-tainted Dewan Housing Finance Corporation (DHFL). The investments date back to a period between March 2017 and December 2018.

ED has registered a separate case against UP Power officials and DHFL under the Prevention of Money Laundering Act (PMLA).

Sources told Moneycontrol, "DHFL had sanctioned a loan of Rs 600 crore to Doit Urban Ventures, which was reportedly controlled by Rana Kapoor's family. Yes Bank debt exposure in DHFL in terms of short term debentures between April-July 2018 was Rs 3,700 crore and Yes Bank also gave a loan of Rs 750 crore to RKW Developers."

RKW Developers and DHFL are under the scanner for financing underworld don Dawood Ibrahim's aide Iqbal Mirchi, who purchased properties in South Mumbai.

Also read: How Rana Kapoor's 'authoritarian' streak proved to be the bank's undoing

On March 6, the Central Bureau of Investigation (CBI) filed a separate case against DHFL and government officials of the UP state power firm.

On March 5, the Reserve Bank of India (RBI) said it is superseding the board of troubled private sector lender Yes Bank with immediate effect. Former State Bank of India CFO Prashant Kumar has been appointed as the bank administrator.

"This has been done to quickly restore depositors' confidence in the bank, including by putting in place a scheme for reconstruction or amalgamation," the RBI said in a statement.

The central bank has also imposed a moratorium on the private lender till April 3, 2020. Withdrawals from the bank have been capped at Rs 50,000 per depositor.

The move by RBI comes nearly six months after it did the same with Mumbai-based Punjab and Maharashtra Cooperative (PMC) Bank. Yes Bank has been grappling with mounting bad loans and has been struggling to raise fresh capital.