The kickbacks were in the place of certain loans
Yes Bank co-founder Rana Kapoor has been arrested by the Enforcement Directorate (ED) in a new money laundering case.
Kapoor’s arrest is in connection with a Rs. 4,300 Crore (£430 million) fraud at the Punjab and Maharashtra Cooperative (PMC) Bank in Maharashtra, officials say.
The former CEO was arrested on Wednesday, January 27, 2021.
The 63-year-old is already in judicial custody after his first arrest by the ED in March 2020. This arrest was also due to money laundering.
Kapoor’s first arrest came in connection with alleged financial irregularities and kickbacks paid to him and his family.
The kickbacks were in the place of certain loans to multiple high-profile borrowers, loans provided by Yes Bank.
As a result, Rana Kapoor’s arrest is under the Prevention of Money Laundering Act (PMLA), according to sources.
In the latest case, the ED is also looking into politician Hitendra Thakur and Housing Development Infrastructure Ltd (HDLI) promoters Rakesh and Sarang Wadhawan.
Earlier in the investigation, the ED raided premises in connection with the case including offices of the Viva Group, controlled by the Thakur family.
The raid took place on Friday, January 22, 2021.
Rana Kapoor, Thakur, and the Wadhawans are accused of “siphoning off” a Rs. 200 Crore (£20 million) loan sanctioned by Yes Bank. The loan was going to a company called Mack Star Marketing Pvt Ltd.
The ED claims that the Wadhawans took the loan from Yes Bank without knowledge of Mack Star’s other stakeholders.
According to a statement, the loan was “siphoned by the Wadhawans by showing it for fictitious purpose”.
The ED claimed: “It was found that the Wadhawans illegally and fraudulently transferred two commercial properties of Mack Star in Kaledonia building, Andheri East (Mumbai) valued at Rs. 34.36 crore (£3.4 million) to Viva Holding, a company of Viva Group.”
For the transfer of these properties, two separate sale agreements were prepared on Monday, June 26, 2017.
Both properties have a sale value of Rs 34.36 crore.
According to the ED, the Wadhawans had “illegally transferred” these properties to Viva Group. Therefore, this is in violation of the article association of Mack Star.
The ED also claim that Viva’s balance sheets fail to show the properties in question.
The ED added: “In the sale agreements, the purchase amount was shown to be paid by 37 cheques by Viva Holding to Mack Star Marketing Pvt Ltd.
“Investigation has revealed that these cheques were never encashed in the account of Mack Star and Viva Holding never made payments for the purchase of the said property to Mack Star.”