Rana Kapoor, former CEO of embattled private lender Yes Bank, told a Mumbai court that he did no wrong, saying he has fully co-operated with the Enforcement Directorate (ED), and that he was “not running away anywhere”.
Kapoor, a co-founder of Yes Bank, was arrested by ED officials at 4.00 am on March 8 after more than 29 hours of questioning. Kapoor was held under the provisions of the Prevention of Money Laundering Act (PMLA), according to ED officials. The arrest became imperative after financial irregularities and mismanagement of Yes Bank surfaced, they said.
The central financial crime-fighting agency argued that Kapoor, a veteran banker, was not co-operating with its investigation and sought his custody until March 13. But they got custody only until March 11.
"I have been under psychiatric treatment since I lost my baby ‘Yes Bank’,” Kapoor said in court. With folded hands, he said, "I am not running away anywhere. ED can take my passport.”
In September 2018, the Reserve Bank of India (RBI) refused to extend Kapoor’s term as CEO. He had to step down by the end of January 2019.
ED officials said they returned Kapoor’s passport on March 8 morning.
Also read: RBI likely to offer Rs 8,000-10,000 crore special liquidity window for Yes Bank
The total proceeds of crime against Kapoor and family are worth Rs 4,300 crore, ED officials said. Yes Bank, India’s fifth biggest private lender, purchased debentures worth Rs 3,700 crore from shadow lender Dewan Housing Finance Corporation Ltd (DHFL) and to cover the transaction, DHFL granted loans of Rs 600 crore against properties worth Rs 40 crore to DoIT Urban Ventures (India) Private Ltd, a company owned by Rana Kapoor’s children, they said.
In his defence, Kapoor said DHFL was an AAA-rated company and in interest of Rs 130 crore was paid on the loan taken by his children's company. “There has been no delay in payments to DHFL,” said Kapoor, who broke down in court.
“The loan belonging to my children's company is a performing loan and the capital of that company is Rs 300 crore and the loan taken by them is around Rs 600 crore,” he said. “The debt-equity of my children's company” is moderate,” he told the court.
Also read: How Rana Kapoor's 'authoritarian' streak proved to be the bank's undoing
The counsel for ED argued in court that the money laundered by Kapoor has been used for personal purpose and the proceeds of crime — Rs 4,300 crore — is public money.
Kapoor's lawyer told the court that his custody should not be granted to ED on medical grounds. “No forensic audit has been done into the books of Yes Bank and ED is doing selective targeting of Kapoor as there is public outrage,” he said.
Earlier on March 8, Kapoor refused to sign on an arrest memo. ED officials then informed his wife Bindu Kapoor of his arrest. The call became necessary because as per ED regulations, officials have to get a signature from an accused as well as a witness who confirms he is the same person.
"I swear by my wife and daughters that I will provide all cooperation,” Kapoor told the court.
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