India's Yes Bank founder Rana Kapoor's custody with Enforcement Directorate till March 16. Kapoor has been held by the probe agency on the charges of money laundering.
A special court in Mumbai on Wednesday extended the coustody, reports Hindustan Times.
The Enforcement Directorate (ED) on Wednesday told the special Prevention of Money Laundering Act (PMLA) court that Kapoor had sanctioned loans worth Rs 30,000 crore, out of which loans to the tune of Rs 20,000 crore have turned into non-performing assets (NPA).
The agency is now looking into the accounts which have turned NPA.
Rana Kapoor, 62, former MD and CEO of the private bank, was arrested by the ED in Mumbai on March 8 under provisions of the PMLA as he was allegedly not cooperating in the probe.
Kapoor was produced before the special PMLA court on Wednesday by the ED, which sought his further custody for seven more days. The court later extended Kapoor's custody to ED till March 16.
On being produced Kapoor, was asked by the court if he had any complaints of ill-treatment against the officers of ED. Kapoor, who admittedly suffers from hearing ailment, told the court that he has been taken for treatment and has no complaints against the agency.
The ED counsel Sunil Gonsalves later began his arguments and told the court that Kapoor and his family are linked to 78 companies. The agency claimed they are scanning the companies which are linked to Kapoor and his family.
Gonsalves contended that the agency is now checking if the money worth Rs 20,000 crore have been diverted to the 78 companies linked to Kapoor and his family and if there was "quid pro quo".
The ED also claimed that they needs to check where the money has gone and if the transactions were genuine.
The special judge however, sought documents from the agency to support their claim.
"You don't bring documents in support of the ground you raise," the court told agency. The agency later produced records of forensic audit of the Yes bank for the perusal of the court.
The plea was later objected by Kapoor's lawyer Satish Manashinde saying that when Kapoor left the bank the NPA account was only 1 percent of the total loan. He alleged that Kapoor has been made scapegoat.
The defense raised questions on searches conducted by the Enforcement Directorate at Kapoor's house much before the case was registered. Manashinde argued that when ED conducted searches, CBI had not registered a case. "Predicate offense was registered much later by CBI and before that ED began probe and case of ED was registered," defense lawyer contended.
As per law ED can begin probe only after a predicate offense is registered by other agency for financial fraud.
The ED countered the issue and claimed that the searches were conducted in respect of case of money laundering against Dewan Housing Finance Corporation Limited (DHFL). It was during that the agency found material related to money laundering by Kapoor and hence separate case was later registered.
Manashinde further contended that when he left the bank the condition of the bank was much better but the management which subsequently took over failed."I cannot be held responsible for the failure of the present management," Manashinde argued.
Rana Kapoor's lawyer denied the allegations that Kapoor recieved kick backs for giving loan. He added that no bribe was taken. Kapoor was hightest paid banker and received amost Rs 50 crores per year from the bank since 2004 till recently, Manashinde argued added that he had recieved awards from various institution as best banker.
The defense further argued that there cannot be allegations of money laundering in the transactions of bank with DHFL as the money taken was much prior to the said transaction.
Enforcement Directorate claimed that Yes Bank bought debentures worth Rs.3700 crores of DHFL. In lieu of the same DHFL sanctioned a Rs.600 crore loan to Doit Urban Ventures Pvt Ltd, a company in which Kapoor's daughters are directors. The loan was given without adequate collateral.
The defense contended that all the three daughters have given security and they are capable of returning the loan amount of Rs 600 crores and it was never in form of kick backs. He also said there are documents to show how the said money is utilised.