What Is Kapoor Being Accused Of?
At present, there are four parallel cases running against Kapoor.
The DHFL Case
The first of these pertains to alleged kickbacks received in return for lending to Dewan Housing Finance Ltd. and related entities.
According to an order from the Additional Sessions Court of Mumbai in May 2020, the Enforcement Directorate had alleged that Kapoor and his family had enriched themselves to the tune of Rs 5,000 crore through kickbacks received from DHFL.
“It is alleged that accused No.1 (Kapoor) has received several hundred crore rupees in kickbacks over bogus loans extended by Yes Bank to DHFL Company beneficially owned by Mr. Kapil Wadhwan & Dheeraj Wadhwan and group companies of DHFL. It is alleged that accused No.1 has misused those kickback amounts for purchasing several properties in the names of his family members,” the sessions court order said.
The ED is seeking conviction under the Prevention of Money Laundering Act or PMLA.
According to the person quoted above, Kapoor has defended himself by saying that there were no kickbacks and all transactions between the bank and DHFL were bona fide.
The ED has also alleged that Kapoor used his position to have Yes Bank subscribe to Rs 3,700 crore worth of debentures issued by DHFL, against which, the housing finance company provided a Rs 600-crore builder loan to DOIT Urban Ventures. The loan was granted to the company without adequate collateral, the ED alleges. Kapoor’s daughters own DOIT Urban Ventures, which does not have the business operations to be able to service this loan, the agency said.
Against these allegations, Kapoor and his family have stated that the loan received from DHFL was a genuine financial transaction and that DOIT Urban Ventures had been repaying interest on these dues regularly.
Similarly, money was routed through RAB Ventures, where Kapoor’s wife is a promoter director. Despite having no operations, the company has been making large investments in subsidiaries through funds received via kickbacks, the ED has alleged.
The Cox & Kings Case
In October 2020, the ED also filed a case of criminal conspiracy and fraud against Ajay Ajit Peter Kerkar, chief executive of travel firm Cox & Kings Ltd., for defrauding Kotak Mahindra Bank Ltd., IndusInd Bank Ltd. and Yes Bank. Apart from Kerkar, the ED has named Kapoor and 12 others as accused in the case, according to a Mumbai sessions court order of January 2021.
The ED alleges that Kapoor approved a Rs 3,642-crore loan to Cox & Kings without conducting proper due diligence, after he held private meetings with Kerkar and other officials of the company. The ED has not alleged any kickbacks were received by Kapoor in this case.
A file photo of Yes Bank founder Rana Kapoor while under investigation. (Photo: PTI)
The HDIL Case
Earlier this year, the ED also alleged that Kapoor had colluded with Housing Development and Infrastructure Ltd. promoters Rakesh and Sarang Wadhawan to extend loans to Mack Star Marketing — money which was then siphoned off. Mack Star Marketing is a joint venture between the HDIL promoters and Delhi-based Ocean Deity Investment Holdings, a former arm of DE Shaw.
According to a person with direct knowledge of the developments, the ED has alleged that loans worth Rs 200 crore were sanctioned to Mack Star by Yes Bank, without the knowledge of Ocean Deity Investment. The funds were then transferred to other HDIL group companies and used to repay other Yes Bank loans. The evergreening of HDIL group loans was done in collusion with Kapoor, the investigative agency has alleged.
The Avantha Group Case
The CBI has booked Kapoor and his wife for allegedly receiving a residential property worth Rs 378 crore, owned by Avantha Group’s Gautam Thapar, against Rs 400 crore that Thapar borrowed from Yes Bank. The loans were sanctioned without any reasonable basis, according to the FIR filed by the CBI on March 12, 2020. The ownership of the property, on Delhi’s posh Amrita Shergil Marg, was transferred to Bliss Abode Private Ltd., which is owned by Kapoor’s wife.
“lt was essentially a sham agreement entered into with an intention to defraud and cheat Yes Bank Ltd. for justifying above loan of Rs. 400 crore to ARL (Avantha Realty Ltd.) for the purpose of acquiring property as above,” the FIR says.