The PMLA court, on Monday, extended YES Bank co-founder Rana Kapoor’s custody with the Enforcement Directorate to March 20.

 The ED had sought another extension of Kapoor’s custody by six days to confront him with documents related to new transactions as well as evergreening of loans. 

Kapoor was arrested by the ED on March 8 under the provisions of the Prevention of Money Laundering Act, and was initially remanded to ED custody till March 11, which was later extended to March 16.

In its remand application, the ED sought the extension of Kapoor’s custody as it is a case that involves large-scale fraud and huge amounts of public money. Additional Solicitor General Anil Singh, appearing for the ED, said that during the course of investigation, it was found that YES Bank had given a ₹202.1-crore loan to Mack Star Advertising, a joint venture between De Shaw Group, which holds 83.36 per cent shares and HDIL holds 16.64 per cent shares.

Building renovation

The ED alleged that HDIL took the loan despite opposition from other shareholders of the company. The building was constructed just two years ago and the purpose of the loan was renovation, the ED investigation revealed.

It further informed the court that Kapoor had a very strong relationship with HDIL promoters Sarang Wadhawan and Rakesh Wadhawan and that the loan was given without the permission of the majority shareholder so that it could be repaid to YES Bank to avoid NPA and insolvency of HDIL Group companies. Singh also informed the court that the ED investigation has also revealed another case where Kapoor had received a prime Lutyens’ Delhi bungalow at a much lesser price than the prevailing market rates.

Kapoor, who was the MD and CEO of YES Bank, had sanctioned ₹400 crore to Avantha Reality, as well as the release of the property on repayment of the loan. 

The property at 40, Amrita Shergill Marg, belonged to Gautam Thapar’s Avantha Reality, according to the ED. This was eventually purchased for ₹378 crore by Bliss Abode, a firm belonging to Kapoor’s wife Bindu Kapoor, and the fund was used to repay the loan to YES Bank.

Evergreening of loans 

It also said Kapoor was involved in evergreening of loans of ₹350 crore with Sumer Group. Kapoor, who was present in court, informed Judge PP Rajvaidya that he has not been keeping well and is being treated for depression and asthma.

“I just want to bring to your notice that my family is providing treatment, but don’t know when it will erupt,” he said.

Meanwhile, his counsel Satish Maneshinde informed the court that Kapoor is being singled out as public sector banks had much higher NPAs and that there is a witch hunt against him.

He pointed out that no action has been taken against the former MD and CEO of a private sector bank. 

“That lady was asked to go,” he said. He also pointed out that when YES Bank gave the loans to companies, including ADAG, IL&FS, Vodafone, DHFL and Essel Group, they were A-listers and had been given loans by other banks also.

SBI, HDFC stake

Meanwhile, State Bank of India, which invested ₹6,050 crore in YES Bank, will hold a 48.21 per cent stake in the private sector lender, while Housing Development Finance Corporation, which invested ₹1,000 crore in YES Bank, will hold 7.97 per cent. 

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