YES Bank Co-founder Rana Kapoor was arrested early on Sunday by the Enforcement Directorate (ED) here and remanded to the investigative agency’s custody till March 11, even as the Central Bureau of Investigation began a probe and lodged a First Information Report (FIR).
Sources said the CBI is investigating financial transactions and links between the crisis-ridden Dewan Housing Finance Corporation Ltd (DHFL), its promoter Kapil Wadhawan and the Kapoor family firms and has lodged an FIR on charges of cheating and criminal conspiracy.
Rana Kapoor’s daughter Roshni Kapoor was stopped at the Mumbai International Airport on Sunday while boarding a flight to London. A lookout notice was issued against the entire Kapoor family including son-in-law Aditya.
Kapoor, who was the Managing Director and CEO of the troubled private sector lender until January 31, 2019, was arrested under the Prevention of Money Laundering Act after being interrogated for over 20 hours. The ED had carried out searches at his residence in Worli and later at the premises of his daughters in Delhi and Mumbai.
Probe on ₹600-crore fund
The ED counsel told a special court on Sunday that Kapoor was not co-operating in the investigation and the role of some of the Kapoor’s family companies needed to closer look. Kapoor, his wife and daughters are being investigated by the ED for a company that is allegedly linked to his wife and daughters receiving ₹600 crore from an entity linked to DHFL.
The funds are alleged to have been given to Kapoor-controlled DoIT Urban Ventures (India) Pvt Ltd when YES Bank invested over ₹3,000 crore in DHFL.
The Sunday developments came after the Finance Ministry and the Reserve Bank of India imposed a moratorium on withdrawals from the bank on March 5, citing governance issues, weak regulatory compliance, wrong asset classification and risky credit decisions. The RBI superseded the bank’s board and capped withdrawals at ₹50,000 per depositor.
On March 6, the RBI had proposed a draft scheme of reconstruction of the bank under which State Bank of India has expressed its willingness to invest in the lender.
Finance Minister Nirmala Sitharaman had said she has asked the RBI will look into what went wrong at the private sector lender and try to fix individual responsibility.