Over Rs 20,000 crore of Yes Bank’s non-performing assets (NPAs) are under the Enforcement Directorate’s scanner. The investigation agency is probing whether these loans were disbursed after receiving instructions directly from the bank’s co-founder Rana Kapoor and whether the latter received ‘kickbacks’ for approving the same, a source told Moneycontrol.
Sleuths suspect that while granting these loans there was a lack of proper due diligence and non-adherence to norms as laid down by the Reserve Bank that led to these loans turning bad later.
ED will soon begin questioning officials from companies that have gone bad, with a source saying that the "list of these companies may increase in coming days as the investigation proceeds." The Central Bureau of Investigation (CBI) will also partner with ED in this probe.
It is likely to call its Yes Bank officials and its former Managing Director Ravneet Gill for questioning in coming days.
Kapoor is also suspected to have created several shell companies, some in the name of his family members, which ED suspects were used to receive kickbacks from the companies gone bad, the source added.
Yes Bank has a total exposure of over Rs 2.5 lakh crore. Of this, around Rs 42,000 crore has gone bad. The actual number of NPAs under the scanner could rise from the current Rs 20,000 crore once the true picture of Yes Bank's financials are revealed. RBI-appointed administrator Prashant Kumar said Yes Bank will announce its third quarter results on March 14.
On February 12, the private lender had informed exchanges that its Q3 earnings will be delayed beyond the regulatory timeframe, citing receipt of “non-binding expressions of interests (EoIs)” and discussions with “several prominent investors” for capital raising.
As per regulatory norms, a company must declare results within 45 days of a quarter end.
The investigation agency is also probing Kapoor's property in the UK and US, the source said. It has provisionally attached 47 paintings, including the one bought from Congress General Secretary Priyanka Gandhi Vadra in 2010 for Rs 2 crore.
Officials are interrogating Rana, his wife Bindhu and daughter Roshni at present. Rana’s custodial interrogation ends on March 11.
Troubles at the new-generation private sector started brewing ever since RBI denied an extension to Kapoor – who is in the ED’s custody on charges of financial mismanagement and money-laundering -- to continue as MD and CEO in September 2018, and had asked the lender to find a new successor.
On March 5, the banking regulator had put a moratorium on the cash-strapped bank, imposed withdrawal restriction of Rs 50,000 till April 3 and superseded its board through appointment of an administrator.
ED arrested Rana on March 8 after registering a case against him on March 7. The case also names former Dewan Housing Finance Corporation (DHFL) promoters Kapil and Dheeraj Wadhawan, who are accused of paying a Rs 600 crore bribe to Rana’s family.
CBI has registered a case against 12 entities including Yes Bank; Rana; Bindhu; their daughters Raakhe, Radha and Roshni; their companies Doit Urban Ventures (India), RKW Developers and Morgan Credits; DHFL; and Kapil and Dheeraj Wadhawan.