The Enforcement Directorate (ED) took Rana Kapoor, co-founder of YES Bank, into custody on Wednesday in connection with a money laundering investigation into Maharashtra MLA Hitendra Thakur's Viva Group.
Kapoor had been arrested in the Yes Bank fraud case on March 8 and was in judicial custody.
On Wednesday, the special PMLA court remanded Kapoor to ED custody until January 30. The Directorate has been waiting to grill Kapoor about a YES Bank loan to real estate developer HDIL, embroiled in the PMC Bank scam, for renovation of a newly constructed building in Andheri, a Mumbai suburb.
The building was constructed by Mack Star Private Ltd, with Rs 1,000 crore invested mainly by Ocean Deity Investment Holding Ltd (ODIL).
ODIL owns 78.09 percent of Mack Star Private Limited, with 21 percent held by HDIL and Warayam Singh, former chairman of the scam-ridden PMC Bank.
However, HDIL, with its smaller shareholding, handled Mack Star’s operations.
When HDIL faced severe financial stress and was not able to repay its liabilities it took loans to the tune of Rs 200 crore from Yes Bank between 2011 to 2015, in Mack Star's name.
This amount was diverted to discharge liabilities owed by HDIL to keep them from being classified as non-performing assets (NPA).
Rana Kapoor is the third person arrested in the case. On January 23, the ED had arrested Viva Group MD Mehul Thakur and Director Madan Gopal Chaturvedi in the same case.
A day earlier, the ED conducted raids on ten premises, including the residence of ‘Bhai’ Thakur, brother of MLA Hitendra Thakur, and the offices of Viva Group.