The Enforcement Directorate has arrested Gautam Thapar, promoter of the Avantha Group for alleged diversion of bank funds, sham transactions with related parties, fabricating books of accounts, and siphoning off funds including various bank loan proceeds.

The ED had lodged a case against Thapar for causing loss to YES Bank of ₹467 crore. The case was filed on a complaint by YES Bank, which had extended a loan of ₹515 crore for ten years in 2017. The loan was to be used for continuing operations of Avantha Group’s Jhabua Power Limited. The CBI is also investigating this case.

The rise and fall of Rana Kapoor

However, the company became a non-performing asset in 2019 and started defaulting on repayments. It was later discovered that only about ₹15 crore actually went to the power company and the end-use of the balance ₹500 crore could not be ascertained, according to an audit done by the bank. It is alleged that the balance has been used to settle loans of the Avantha Group instead of using it for operating the power company.

Earlier, Thapar was named in a real-estate case involving YES Bank founder Rana Kapoor. It was alleged that Thapar offered “illegal gratification in lieu of favours extended in connection with official work” by selling a bungalow in South Delhi to Kapoor in return for loans sanctioned to the Avantha Group.

Thapar has been in trouble over the last two years involving other group entities too. In 2019, CG Power ousted him as chairman after disclosures were made by the company that some employees had carried out unauthorised transactions, which led to a potential understatement of not only the liabilities but even advances to related and unrelated parties of the company and the group.

A forensic audit of CG Power found that various banks, auditors and the company’s board were aware of the transactions, which are now being investigated for fraud and manipulation.

Online gaming yes, money laundering no