Yes Bank founder Rana Kapoor's daughters Roshni Kapoor and Radha Kapoor have pleaded innocent to the financial wrongdoings at the bank, Enforcement Directorate (ED) sources told Moneycontrol.
The daughters, in their statement to the ED on March 8 and 11, said they did not have any knowledge about the initial investment in Morgan Credits India Private Limited (MCPL) and Yes Capital Private Limited (YCPL), where they are directors.
The ED has accused Kapoor, his family members and others of laundering "proceeds of crime" worth Rs 5,050 crore by receiving alleged kickbacks in lieu of extending big loans through their bank that later allegedly turned non-performing assets.
Kapoor and family had as many as 101 investments configured through three holding firms -- MCPL, YCPL and RAB Enterprises, according to the ED. The family holding companies invested across 15 mutual funds and owned a collection of 59 paintings worth Rs 4 crore.
Investment spree
According to ED investigations, the Kapoor family first began these investment companies from 1991. That was the year MCPL was formed. YCPL, previously named DoIT Capital, was incorporated in May 2003. Later that year -- Yes Bank was formed in 2004 -- both these companies were approved by the Reserve Bank of India (RBI) as investment companies.
Rana Kapoor's has three daughters -- Radha, Raakhee and Roshni. In MCPL and YCPL, each of them has a 33.33 percent stake. Raakhe is settled abroad.
Roshni Kapoor, the youngest daughter, in her statement to the ED, said she was just ten years old when MCPL and YCPL were set up in 2003-2004.
A similar statement was given by Radha Kapoor, the second daughter, according to ED sources. "I am not aware about initial investment of MCPL and YCPL. My father handles all business so he might know about investment in MCPL and YCPL," Radha’s statement reads, as per the source.
On her part, Roshni Kapoor has given details about the subsidiary companies of MCPL and YCPL, including DOIT Urban Ventures Private Limited (DUVPL), which has received loans from Dewan Housing Finance Limited (DHFL).
The ED on May 14 arrested DHFL promoters Kapil and Dheeraj Wadhawan in connection with its money laundering probe against Rana Kapoor.
Rana Kapoor was arrested on March 8, and is in judicial custody. He has denied any wrongdoing.
According to sources privy to the matter, the ED is not taking the statements of Rana Kapoor’s daughters at face value. The agency thinks Yes Bank had bought DHFL debentures worth of Rs 3,700 crore and thereafter, DHFL had paid back Rana Kapoor under the garb of a loan to DUVPL.
It was clear that DUVPL had no business activities and the loan could not be repaid by the entity, the sources noted.
"Public deposits of Yes Bank were used for purchasing these Rs 3,700 crore worth debentures and the loan given to DUVPL was to camouflage the entire act. This Rs 600-crore loan was further invested through its subsidiaries to obfuscate the proceeds of crime and its end use," another ED source told Moneycontrol.
Daughters knew about business dealings
"In fact, all this happened in full knowledge of the three daughters as they are the beneficial owners of DUVPL. The daughters have done intentionally, deliberately and laundering the same for their own personal gain. They all actively participated in the generation of proceeds of crime," the person futher added.
Two earlier loans of Rs 300 crore each, given to DUVPL by DHFL, were duly closed in August, 2018. A renewed loan of Rs 600 crore was later granted, and against that loan, DUVPL had mortgaged five real estate assets on inflated valuation prices.
However, the loan offered to DUVPL by DHFL has a conducive clause. The principal amount will have to be repaid only in 2023, five years after disbursement, and in the meanwhile, the company has to pay only the interest.
The ED investigation has also shed light on the active role of a senior Yes Bank executive, who recorded statements several times. The person, according to ED officials, was in regular touch with DHFL promoter Kapil Wadhawan during the loan disbursement.
Another source who has given statements to the ED told Moneycontrol: "Rana Kapoor approved a loan to RKW Developers, a group company of DHFL, via SMS. He has ordered Yes Bank officials concerned to clear the loan.”
According to the person cited above, the loan was offered to the DHFL-linked company “at a lower-than-regular interest rate”.
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