The Central Bureau of Investigation (CBI) on Sunday filed a case against Yes Bank founder Rana Kapoor hours after the Enforcement Directorate (ED) procured his custody in a case of alleged financial irregularities involving Yes Bank and the troubled reality company Dewan Housing Finance Limited (DHFL).
The 62-year old banker was arrested in the wee hours of Sunday after a raid on his residence on Saturday evening by the ED under the Prevention of Money Laundering Act (PMLA). The CBI probe is likely to focus on the alleged criminal conspiracy and corruption aspects of the case.
Yes Bank is facing a financial crisis and the RBI has appointed an administrator to run its affairs after setting its management aside. The Bank has been put under a moratorium for 30 days during which efforts will be made to bail it out by the infusion of fresh funds from possible investors like the State Bank of India.
The Central government has questioned the role of Bank management in the financial crisis primarily engendered by poor loan-debt management. The Bank's lending to some struggling corporates like DHFL has also been seen as poor decisions.
Kapoor's role came under scanner after it was revealed that DHFL, which had received loans from Yes Bank, had lent Rs 600 crore to a company-- Doit Urban Ventures-- linked to his family.
Yes Bank's loans to DHFL have not been recovered and the firm and its promoters are under investigation for irregularities including money laundering.
The Bank is alleged to have lent about Rs 100 crore to another company-- RKW Developers—which has links with Kapil Wadhawan.
ED has Kapoor's custody till April 11 and he will be questioned regarding these loans and the suspected quid pro quo loans for companies linked to his family.
Kapoor is reported to have defended the loans to DHFL and before a special Mumbai court said news agency ANI. He is also said to have defended the loans given by DHFL to his daughter's company.
"My daughters received money as part of empowering women scheme and their companies are performing well and are paying off the loan on time," Kapoor was quoted as saying.
Withdrawals from Yes Bank have been capped at Rs 50,000 for every account holder till April 3 but the government and the central Bank have assured that depositors' money was safe and exigency withdrawals of larger amounts were permitted.