YES Bank former managing director (MD) and chief executive officer (CEO) Ravneet Gill told the Enforcement Directorate (ED) that the bank had sanctioned huge amounts of credit to many corporates that were facing significant stress and liquidity issues.
An ED chargesheet quoted Gill as saying that the private lender on March 31, 2019, had put out a credit watchlist naming several large corporates/borrowers. These included Reliance Group, Essel Group, Cox & Kings, Dewan Housing Finance, Omkar Group, Radius Developer and others. “In this watchlist, the bank took a contingency provision of Rs 2,000 crore as a measure of prudent accounting and transparency,” said the ED chargesheet.
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The chargesheet also contained statements made by other bank executives, alleging that co-founder Rana Kapoor had overruled objections by risk teams while extending loans to realty firms — RKW Developers and Belief Realtor — owned by DHFL promoters.
“It was classified as a red-flagged account in November 2019, on the ground of non-commensurate progress in the project vis-à-vis the amount disbursed. Of the total sanctioned loan of Rs 1,700 crore, Rs 750 crore was disbursed on the same day of sanction,” according to a senior executive’s statement cited by the ED.
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The official said the bank had to cancel the additional loan of Rs 950 crore after the Reserve Bank of India (RBI) started special audit of the account.
Rana Kapoor’s wife Bindu has been charged with being aware of the source of monies that were being routed through these companies.
“She was hand in glove with her husband, using the account of these companies and helping siphon off multiple accounts of other 100-plus subsidiaries and utilising and projecting them untainted. She was abetting the crime, thereby being actually involved in laundering,” the report said.
The special court of Prevention of Money Laundering Act (PMLA) has taken cognizance of the first chargesheet filed on Friday in connection with money laundering charges against Kapoor, his family members and their three companies.
“This is a complex case of financial frauds and there are many interlinked transactions and entities. These transactions have by design been conducted in a convoluted manner,” the ED said. According to the ED, the huge scam was brewing for many years during the tenure of Kapoor. “It is evident that the accused person knowingly indulged in these criminal activities and its consequent generation of proceeds of crime. The end beneficiaries of these transactions were Kapoor and his family members, along with associates,” noted the report.